AfDB Cuts Africa 2026 Growth Forecast to 4.2% Amid US War on Iran

By Al Mayadeen English

27 May 2026 17:10

Disruptions to global energy and fertilizer markets fuel inflation, weaken currencies, and threaten food security across the continent.

The African Development Bank warned Tuesday that the economic fallout from the US-Israeli war on Iran is increasingly weighing on African economies, as disruptions to global energy and fertilizer markets fuel inflation, weaken currencies, and threaten food security across the continent.

In its latest economic outlook presented during the bank’s annual meetings in Brazzaville, the AfDB projected Africa’s growth rate at 4.2% for 2026, down from 4.4% recorded last year, while warning that a prolonged war could trigger an even sharper slowdown.

The bank linked the weaker outlook to supply chain disruptions and soaring import costs triggered by the expanding Middle East conflict, particularly after Washington’s military escalation against Iran intensified instability around the Strait of Hormuz, a corridor through which roughly one-fifth of global oil supplies and a major share of global fertilizer exports transit.

"The impact of this shock on growth and macroeconomic stability will depend on the duration of the supply chain disruptions and their effects on global energy and fertilizer prices," the report said.

Growing fears of wider economic crisis

A separate report issued jointly by the AfDB, the African Union, and UN agencies earlier this year warned that Africa could lose at least 0.2 percentage points of growth in 2026 if the war drags on for more than six months. The report said higher fuel and food prices could rapidly evolve into a continent-wide cost-of-living crisis.

The economic strain is already prompting governments to seek emergency financial assistance. A Reuters report published last week revealed that 27 countries have activated or are preparing to activate World Bank crisis-financing mechanisms since the outbreak of the war on February 28.

Kenya has acknowledged seeking rapid World Bank support to manage rising fuel import costs, while multiple governments across Africa are facing mounting debt and inflation pressures amid fears of IMF-linked austerity measures.

East Africa among hardest hit

East Africa, traditionally the continent’s fastest-growing region, is expected to be among the hardest hit as fuel and transport costs surge. Reports from several countries point to worsening economic stress linked to the conflict.

In Kenya, fuel prices reached record highs in April, forcing transport operators to raise fares by roughly 25%, while exporters faced shipping delays linked to rerouted maritime traffic.

In Ethiopia, authorities reported severe fuel shortages after diesel supply volumes were nearly cut in half, contributing to sharp increases in the prices of cooking oil, eggs, and other basic goods.

Fertilizer and food security concerns deepen

The crisis has also intensified concerns over fertilizer access. The Gulf region remains central to global ammonia, LNG, sulfur, and urea exports essential for agricultural production, with analysts warning that disrupted supplies during planting seasons could reduce crop yields across vulnerable African states.

The World Food Programme warned Wednesday that the ongoing US-Israeli war on Iran is contributing to historic levels of global hunger, with rising oil and transport costs pushing millions deeper into food insecurity, including populations across Africa already struggling with inflation and humanitarian crises.

AfDB pushes domestic financing strategy

Despite the worsening outlook, the AfDB said Africa remains among the world’s fastest-growing regions alongside Asia, and forecast growth could recover to 4.4% in 2027 if the Middle East crisis subsides within several months.

AfDB President Sidi Ould Tah said the continent must reduce dependence on shrinking foreign aid and mobilize domestic capital to shield itself from future geopolitical shocks.

"Achieving sustained and inclusive growth will require a substantial increase in investment," Tah said in the report.

Tah added that Africa would need to maintain annual growth above 7% over decades in order to generate sufficient employment opportunities and significantly reduce poverty across the continent.