A short flare-up, a grinding two-month confrontation or a doomsday escalation – each possible path of the Iran war carries very different risks for Africa’s economy and diplomacy
By Sheriff Bojang Jr
As the Iran war intensifies, governments across Africa are watching the unfolding crisis with growing unease. Conflicts in the Gulf rarely remain confined to the region, and the economic shockwaves often travel quickly through global energy markets and shipping lanes before reaching African economies thousands of miles away.
The current conflict is already spilling across the Gulf. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates have all faced Iranian missile and drone attacks in retaliation for US and Israeli strikes on Tehran.
Various scenarios
For African countries, the fallout comes through markets, including rising fuel prices, disrupted shipping routes and fresh pressure on already fragile economies.
Early hopes that the confrontation might burn out quickly are fading. Dan Alamariu, chief geopolitical strategist at Alpine Macro, an Oxford Economics company, now estimates the conflict could last about two months.
“We initially estimated the conflict to last one to three weeks, with a maximum of two months,” Alamariu says. “As the war unfolds, we now expect something closer to roughly two months, though the dynamics remain self-limiting.”
In an in-depth analysis for Pakistan’s leading daily Dawn, veteran journalist and regional analyst Ejaz Haider outlines three possible trajectories: a grinding war of attrition between Iran and US-Israeli forces, a pressured ceasefire driven by major powers seeking regional stability, or, in the worst case, an uncontrolled escalation that could disrupt key shipping routes such as the Strait of Hormuz and trigger a global energy shock.
For Africa, each scenario could play out very differently. The continent has so far avoided direct military fallout. But some places sit close to the conflict’s expanding geography. Djibouti is one of them.
The small Horn of Africa state hosts Camp Lemonnier, the only permanent US military base in Africa. The facility lies within range of drones and missiles launched by Houthi forces in Yemen and plays a central role in US operations across the Red Sea.
“As Iran expands its retaliation campaign with missile and drone strikes targeting US-linked military installations in the region, an attempt by Houthi forces to strike the facility is credible,” the risk consultancy Control Risks said in a recent note to its clients.
“Somaliland could also credibly be targeted by Houthi elements in retaliation for its growing ties with Israel, but the lack of established military facilities makes this less likely.”
But for most African countries, the real danger is likely to come from markets and not missiles.
Scenario one: A short shock and rapid de-escalation
In the first scenario, the conflict flares sharply but burns out quickly. Oil markets react immediately as traders fear attacks on tankers moving through the Strait of Hormuz or vessels crossing the Red Sea. Energy prices spike, financial markets wobble and political pressure builds in Washington as the economic fallout becomes visible.
Now in its third week, the conflict may already be moving beyond this phase.
In this version of events, the US, perhaps alongside Israel, eventually pulls back and diplomatic pressure produces a ceasefire before the confrontation spreads further.
As global uncertainty rises, investors typically flee to ‘safe-haven’ currencies like the US Dollar…
But even a brief shock could hit Africa quickly. Many African economies import large volumes of refined petroleum products and liquefied natural gas. When global energy prices jump, the impact moves rapidly through domestic economies.
Transport costs rise. Electricity systems dependent on imported fuel come under strain. Food prices follow.
“For African governments, the crisis becomes ‘full-fledged’ when it triggers a fiscal and monetary squeeze,” says Phumlani M Majozi, senior economist at the African Markets Institute (AMI). “As global uncertainty rises, investors typically flee to ‘safe-haven’ currencies like the US Dollar, causing local African currencies to depreciate.”
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Still, if the conflict cools quickly, the damage may be limited. Once markets conclude the confrontation will not escalate further, energy prices would stabilise and pressure on African economies would ease.
Politically, Iran could even emerge stronger. If Tehran survives a confrontation with Israel and the United States, it may claim strategic resilience, a message that, analysts say, could resonate across parts of the Global South, including Africa.
Scenario two: A two-month regional confrontation
The second scenario – currently the most plausible according to Alamariu – is a conflict that drags on for several weeks. In this case, the war lasts long enough for the economic shock to take hold. Oil prices stay high. Shipping risks increase. Governments begin to feel the strain.
For Africa, the first impact would likely come through trade routes. Around 10%–12% of global trade moves through the Red Sea and the Suez Canal, linking Europe with Asia and East Africa. If the conflict continues, insurance costs for shipping could surge and some vessels may reroute around the Cape of Good Hope.
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Iran has effectively shut down traffic through the Strait of Hormuz, one of the world’s most important oil corridors. Enonomists warn the consequences could be felt quickly across African economies.
Countries such as Kenya, Ethiopia and Tanzania depend heavily on Red Sea shipping routes for trade with Europe and the Middle East. Higher freight costs would squeeze exporters already dealing with weak global demand, while import-dependent economies would face rising prices for consumer goods, industrial supplies and fuel.
Energy markets would remain under pressure. Roughly one fifth of the world’s oil supply passes through the Strait of Hormuz, meaning even the threat of disruption can push prices higher.
“As Iran continues to target energy facilities in the Gulf and disrupt shipping through the Strait of Hormuz, Africa will be primarily hit through higher energy prices,” said Control Risks, adding that the continent’s largest net importers of refined petroleum products, including Democratic Republic of Congo, Ethiopia and Mozambique, are among the most exposed to surging oil prices.
South Africa’s finance minister also warned on 5 March that a prolonged spike in oil prices could drive inflation higher if the conflict lasts longer than four weeks.
Fuel prices are already beginning to react. “Pump prices have already increased in Nigeria, and a prolonged hike will test the government’s commitment to letting market forces determine petrol [gasoline] prices,” Control Risks said.
For households, the effects could be immediate.
“Because many African nations are net importers of refined petroleum and chemical fertilisers, a spike in Middle Eastern tensions immediately raises the cost of transport and food production,” says Majozi. “When the price of a litre of petrol or a bag of maize rises in a local market in Nairobi or Lagos, the conflict is no longer a headline — it becomes a reduction in a family’s purchasing power.”
Beyond economic disruptions, international security analyst Fola Aina says instability in the Middle East historically produces indirect security spillovers across Africa, citing shifts in external military engagement, the reallocation of international security resources and the potential expansion of proxy dynamics in fragile regions.
“Countries already facing conflict pressures, particularly in the Sahel region and the Horn of Africa, could experience heightened vulnerability if global diplomatic attention and security assistance are diverted toward the Middle East crisis,” he says.
Scenario three: The doomsday escalation
The most dangerous scenario is already beginning to unfold. The conflict is widening beyond Israel and Iran, drawing in Gulf states, Hezbollah in Lebanon and deeper US military involvement, while major disruptions in the Strait of Hormuz have rattled global energy markets. Tanker traffic has slowed sharply and oil prices have surged, with no clear end in sight.
Both Washington and Tehran insist they have the capacity to keep fighting. Donald Trump has warned the United States could escalate its response if Iran continues to disrupt shipping, while Iranian leaders say the country is prepared for a prolonged confrontation.
Israel, meanwhile, has signalled that its campaign may continue until Iran’s military power and possibly the regime itself, is severely weakened, raising fears that the conflict could spiral into a much broader regional war.
If the crisis drags on for months, the financial pressure could become severe. According to Majozi, African countries could face a “double squeeze” as rising fuel subsidy costs collide with weakening currencies and growing debt burdens.
With Africa’s average debt-to-GDP ratio hovering around 63% in 2026, sustained oil prices above US$100 could push vulnerable economies closer to new debt restructuring negotiations.
“For countries already at high risk of over-indebtedness, like Ethiopia or Zambia, a multi-month energy shock could be the tipping point that necessitates a formal debt restructuring under international frameworks, as domestic resources are completely swallowed by the rising cost of fuel and finance,” Majozi tells The Africa Report.
Given the widespread poverty and financial vulnerability across parts of the continent, Aina argues, spikes in fuel and food prices have historically triggered protest cycles and episodes of political unrest in several African states. A prolonged conflict in the Middle East could therefore “act as a catalyst that intensifies existing economic grievances and, in more fragile political environments, potentially translates into heightened risks of instability”.
