Surging Oil Prices, Currency Depreciation Deepen Economic Pressures on African Economies
African economies are facing heightened vulnerability as escalating geopolitical tensions in the Middle East trigger sharp increases in global commodity prices, with multilateral institutions warning of immediate and long-term risks to the continent’s economic stability.
In a joint engagement on the sidelines of the 58th Session of the United Nations Economic Commission for Africa (UNECA) in Tangier, the African Development Bank (AfDB), African Union Commission (AUC), United Nations Development Programme (UNDP), and UNECA outlined coordinated policy responses to cushion economies and strengthen resilience.
According to the institutions, the current wave of shocks is transmitting more rapidly and through more concentrated channels than previous global disruptions, leaving African economies with limited adjustment time.
Chairperson of the African Union Commission, H.E. Mahmoud Ali Youssouf, cautioned that “continued escalation of the conflict worsens global instability, with serious implications for energy markets, food security, and economic resilience, particularly in Africa where economic pressures remain acute.”
The report notes that global oil prices have surged by over 50 percent as of late March, intensifying inflationary pressures across the continent. At the same time, 29 African currencies have depreciated, increasing the cost of external debt servicing and imports of critical commodities such as food, fuel and fertilizer.
Supply chain disruptions linked to Gulf energy exports are also constraining access to key agricultural inputs, including ammonia and urea, during the crucial March–May planting season. This development is expected to weigh on agricultural output and heighten food insecurity risks, particularly among low-income and import-dependent economies.
Describing the situation as both a test and a turning point for the continent, Executive Secretary of UNECA, Claver Gatete, underscored the need for a strategic shift in Africa’s economic response.
“Africa has been hit by too many external shocks not of its making,” he said, adding that “this moment calls for decisive action to protect people now, while accelerating Africa’s long-term push towards energy security, food sovereignty, and financial self-reliance.”
Similarly, UN Assistant Secretary-General and Director of UNDP’s Regional Bureau for Africa, Ahunna Eziakonwa, stressed the importance of policy coordination and political will in navigating the crisis.
“With the right mix of policy choices, financing tools, and political resolve, Africa can weather this shock and emerge more resilient, more self-reliant, and better positioned to shape its own economic future,” she stated.
The joint brief proposes a three-tier policy framework, beginning with immediate interventions to stabilize fuel, food and fertilizer supply while cushioning vulnerable households. This is to be followed by medium-term reforms aimed at strengthening energy security, expanding targeted social protection, and advancing intra-African trade under the African Continental Free Trade Area (AfCFTA).
In the long term, the institutions advocate structural reforms focused on enhancing domestic resource mobilization and establishing African financial safety nets, including the accelerated implementation of the African Financing Stability Mechanism.
President of the AfDB Group, Sidi Ould Tah, emphasized the need for coordinated institutional action, noting that “as global crises multiply, Africa’s response must evolve from managing shocks to fostering resilience.”
He added that aligning efforts across African institutions and development partners will be critical to mitigating short-term impacts while laying the foundation for sustained economic resilience.
The institutions conclude that strengthening regional integration, scaling up African-led financial solutions, and investing in energy, food and trade systems will be key to transitioning the continent from vulnerability to preparedness.
