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Industries
Africa's economies are facing a new threat from the war in the Middle East after a strong 2025, with the African Development Bank warning that the shock could cut growth across the continent by up to 1.5 percentage points this year.
Fuel-importing countries such as Malawi, Sierra Leone and Ethiopia are especially exposed, with higher living costs, weaker trade balances and tighter financing all moving against them at once, according to the IMF.
What makes this period different is that policymakers are better prepared than they were during earlier shocks. Lessons from the Covid-19 pandemic and the war in Ukraine have given governments more tools to respond, even if the pressure from global energy markets is still significant.
The strain is also forcing difficult choices in larger economies. In South Africa, where coal still provides more than half of electricity generation, the oil shock could slow the shift toward cleaner energy as policymakers try to protect industry and preserve power stability.
At the same time, some countries are pushing ahead with industrial strategies despite the uncertainty. In Benin, cotton production has become a base for a wider manufacturing push, with the country now producing finished garments at home instead of exporting most of its crop raw.
