April 24, (THEWILL) — S&P Global has warned that the ongoing Middle East conflict could heighten risks for African economies, particularly if the crisis persists, with potential implications for sovereign credit ratings across the continent.
In its latest assessment, the ratings agency said many African countries remain vulnerable due to their dependence on imported fuel, oil, and fertilisers. Rising global prices for these commodities are expected to fuel inflation, widen fiscal deficits, and strain external balances, increasing the likelihood of rating pressures.
“Many African sovereigns have limited fiscal space to absorb external shocks”, S&P noted, adding that higher import costs could weaken economic performance and slow growth, especially among net energy importers.
The impact is expected to vary across countries. Oil exporters such as Angola, Republic of Congo, and Cameroon could benefit from higher crude prices, although gains may be partly offset by continued reliance on imported refined fuel. Nigeria may be better positioned due to expanding domestic refining capacity, including output from the Dangote refinery.
S&P also highlighted the role of local capital markets in cushioning shocks, noting that countries such as South Africa, Morocco, and Egypt could better manage rising borrowing costs due to more developed financing options.
However, the broader outlook for African sovereign credit has weakened. Higher fuel costs are expected to increase inflation, put pressure on exchange rates, and raise refinancing costs. Fertiliser price increases could further strain food production and household budgets over time.
While direct trade exposure to the Middle East remains relatively limited, supply chain disruptions and global risk aversion are already pushing up borrowing costs, signalling a more challenging outlook for African economies.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
