The World Bank has issued a stark warning that escalating geopolitical tensions, particularly the ongoing conflict involving Iran, could drive up inflation and slow economic growth across Africa, with oil-importing countries like Kenya facing the greatest risks.
In its latest outlook, the Washington-based lender said rising global oil and food prices linked to the Middle East crisis could significantly strain economies already grappling with debt and structural challenges.
“Sub-Saharan Africa’s economic recovery from a decade of global shocks is showing signs of stalling,” a World Bank official said. “Geopolitical risks, including the conflict in the Middle East, high debt service burdens, and long-standing structural constraints, continue to weigh on the region’s capacity to accelerate growth and create jobs.”
The lender revised its 2026 growth forecast for Sub-Saharan Africa downward by 0.3 percentage points to 4.1 percent, while projecting inflation to rise to 4.8 percent, up from an earlier estimate of 3.8 percent.
Oil prices have surged sharply following tensions in the Gulf, with Brent crude rising by as much as 55 percent to over Sh14,000 ($112) per barrel at the peak of the crisis. Although prices later eased slightly after a temporary ceasefire, they remain significantly elevated, sustaining pressure on fuel and commodity costs.
The World Bank noted that countries like Kenya, which rely heavily on imported fuel and food, are particularly exposed. Rising fertilizer prices and transport costs are expected to push up food prices, worsening the cost of living for households.
The institution warned that inflation in Kenya could rise by up to 4 percent, potentially reducing household incomes by 2.6 percent and pushing nearly one million people into poverty.
World Bank Africa Chief Economist Andrew Dabalen cautioned governments against reactionary measures. “Countries should avoid blanket subsidies on essential goods such as fuel, as these can strain public finances and undermine long-term economic stability,” he advised.
The report also flagged risks to investment and remittance flows from Gulf countries, which play a key role in supporting African economies. Disruptions could further dampen growth as nations in the Middle East prioritize domestic recovery.
With uncertainty lingering in global energy markets, the World Bank urged African governments to adopt prudent fiscal policies and strengthen resilience to external shocks to cushion their economies from the unfolding crisis.
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