Iran War Pushes Oil Up 30%, Risks Africa Growth Slowdown: IMF

Oil prices have surged more than 30% since late February following the Iran conflict, threatening to slow economic growth and fuel inflation across Africa, with the warning that the shock could push millions deeper into food insecurity, according to Bloomberg.

The spike in crude prices, alongside a sharper rise in fertiliser costs, is placing renewed strain on African economies that had entered 2026 on relatively strong footing after recording their best growth performance in a decade. The latest geopolitical shock, however, risks reversing those gains as import costs rise and fiscal pressures intensify.

Oil and Fertilizer Prices Surge

Since the outbreak of hostilities involving Iran on February 28, global oil prices have climbed by over 30%, while fertiliser prices have increased even more sharply. The dual shock is particularly significant for African economies, many of which rely heavily on imported fuel and agricultural inputs.

Higher energy costs are expected to raise transport and production expenses, which will then increase consumer prices. At the same time, rising fertiliser costs threaten agricultural output, increasing the risk of food price inflation across the continent.

This combination of energy and food inflation is likely to weigh heavily on households, particularly in lower-income countries where food and fuel account for a large share of consumer spending.

The IMF has already revised down its growth projections for sub-Saharan Africa, citing the impact of rising commodity prices, global uncertainty, and supply chain disruptions linked to the conflict. The institution warned that the outlook could deteriorate further if tensions persist.

According to the IMF, as many as 20 million additional people in the region could face food insecurity due to the combined impact of higher prices and weaker economic activity. This comes at a time when the region is still recovering from earlier shocks, including the COVID-19 pandemic and the fallout from the Russia-Ukraine war.

The slowdown reflects a broader pattern in which external shocks—often originating outside the continent—have significant economic consequences for African nations.

Rising Debt and Fiscal Pressures

Despite some improvements in fiscal management in recent years, vulnerabilities remain. The IMF estimates that more than one-third of African countries are either at high risk of debt distress or already experiencing it.

Higher oil prices typically widen fiscal deficits in net-importing countries, as governments face increased subsidy burdens and higher import bills. At the same time, rising global interest rates and tighter financial conditions can limit access to external financing.

This combination of rising costs and constrained funding options could force governments to cut spending or increase borrowing, further complicating economic management.

The economic pressures triggered by the Iran conflict could also have social and political consequences. Several African countries have already witnessed protests linked to high living costs and limited economic opportunities.

Rising inflation, particularly in food and fuel, has historically been a key driver of unrest in the region. The current situation raises concerns that similar dynamics could re-emerge if price pressures intensify.

Policymakers are therefore likely to face difficult trade-offs between maintaining fiscal stability and supporting vulnerable populations through subsidies or social programmes.

Resilience and Uneven Impact

While the overall outlook has weakened, the impact is expected to vary across countries. Larger economies such as South Africa and Nigeria are considered better positioned to absorb the shock compared to smaller or more vulnerable nations.

Some countries have strengthened their fiscal frameworks and external balances since the pandemic, providing a degree of resilience. However, the extent to which these buffers can offset the current shock will depend on how long the conflict persists and how global commodity prices evolve.

The situation underscores the continued exposure of African economies to global events beyond their control, highlighting the importance of diversification and stronger domestic economic structures.

As the conflict continues to influence global markets, the trajectory of oil prices and broader geopolitical developments will remain key factors shaping Africa’s economic outlook in 2026.