Key points
- Heavy reliance on oil imports leaves African nations exposed to supply shocks, including during the current conflict in the Middle East.
- Senegal, Benin, Eritrea, Burkina Faso and Zambia could experience the greatest economic shocks if oil prices remain high, according to our analysis on the impact on international reserves and other risk factors.
- Across Sub-Saharan Africa, the ongoing crisis could substantially increase inflation and push up interest rates.
- Ethiopia’s push to electrify its road transport system offers an example of how other nations could mitigate against current and future shocks.
- Countries can also shield themselves from gas supply shocks by favouring renewable energy paired with battery storage over gas-fired power plants.
Reliance on oil imports exposes Sub-Saharan Africa’s economy to risks from the Middle East conflict
As a net importer of oil products, Sub-Saharan Africa will not be immune from the fallout of the ongoing conflict in the Middle East. After US and Israel strikes killed Iran’s Supreme Leader, Ali Khamenei, Iran responded by closing the Strait of Hormuz and launching strikes against major oil and gas infrastructure in Saudi Arabia, Qatar and elsewhere.
Iran is effectively halting roughly 20% of global oil and LNG trade by blockading the Strait of Hormuz, and has succeeded in curbing the production of liquid fuels. This has sent oil and gas prices surging, despite the Trump administration’s efforts to restart maritime traffic flows.
Sub-Saharan Africa faces multiple knock-on impacts. The cost of importing oil has already climbed, with Brent crude rising 18% in the first four trading days of March. Along with a sell-off of African currencies as investors flee to the US dollar and other safe-haven assets, this will push up import bills across the region.
This is particularly problematic for countries that are both highly reliant on foreign oil and have low foreign exchange reserves.
Meanwhile, the current Middle East crisis could raise food prices via another mechanism as well: Higher fertiliser costs. Synthetic nitrogen fertilisers are usually produced using fossil gas, the cost of which has jumped since Iran blocked the Strait of Hormuz and forced an LNG production halt in Qatar.
While Africa’s fertiliser use is low compared to other regions, previous shocks reduced fertiliser use on the continent and worsened already poor crop yields, thereby exacerbating food insecurity.
Our analysis highlights the countries most at risk from economic shocks related to increased oil prices
We analysed import data and international reserves for 29 countries in Sub-Saharan Africa for which data is readily available to see the impact of higher oil prices on import cover, an economic indicator measuring the number of months a country can pay for its imports using only its current international reserve holdings.1Countries analysed: Angola, Benin, Botswana, Burkina Faso, Cameroon, Chad, DR Congo, Congo, Cote d’Ivoire, Eritrea, Ethiopia, Gabon, Ghana, Kenya, Lesotho, Madagascar, Mauritius, Mozambique, Namibia, Nigeria, Rwanda, Senegal, South Africa, South Sudan, Sudan, Tanzania, Uganda, Zambia, Zimbabwe. Note: Our model analyses economic risk by considering each country’s incremental import costs, baseline reserves position, and projected drain on reserves. Note: A threshold whereby extra oil import costs exceed 1% of GDP is applied to show a GDP risk score of 10 as a calibration point. This reflects the level at which an oil price shock begins to generate material balance of payments stress, and is consistent with IMF analysis of commodity price shocks in Sub-Saharan Africa, where oil import cost increases of 2.5% of GDP have been associated with urgent financing needs for several regional blocs. Note: A threshold whereby countries with less than three months of baseline import cover score high on the risk scale is applied, which is consistent with traditional metrics, per the IMF. Note: The analysis does not adjust for inflation in calculating oil import impacts. Our analysis showed that Senegal, Benin, Eritrea, Burkina Faso and Zambia could experience the greatest economic shocks from the current period of elevated oil prices, as measured by their baseline import cover ratios, projected drain on international reserves, and the incremental oil cost as a percentage of GDP.
Figure 1
High import dependence and low reserves create vulnerabilities for Sub-Saharan African countries as oil prices rise
Zimbabwe, for example, is a landlocked nation that imports all of its oil products. With oil prices rising from USD 70.69 per barrel at the end of January to USD 85.41 per barrel as of 5 March, the country’s annual import bill could rise by an estimated USD 195 million, according to our modelling, which assumes import volumes remain constant. Higher oil prices mean Zimbabwe risks depleting its international reserves, which were already low before the crisis, equating to less than one month of its total import bill.
As is the case in other countries with low reserves relative to total imports, Zimbabwe may experience ongoing currency depreciation pressures.
If oil prices surge further to USD 100 per barrel, the risk to large economies becomes material as well. South Africa’s oil product import bill could rise by USD 6.1 billion per year, should import volumes hold steady, implying a notable drain on reserves, which totalled USD 65.4 billion in 2024, per the World Bank. (However, these calculations do not take into account the potential boost to reserves that would come from higher gold prices in nations that export bullion, including South Africa.)
Under this high-price scenario of USD 100 per barrel, Sudan and Uganda would see their import cover decline to risky levels, which is generally considered to be less than three months.
The nine countries in the region that are already in this high-risk category will see their import cover ratios decline towards zero, while others, including Tanzania and Cote d’Ivoire, will drop near the threshold.
Figure 2
Higher inflation and borrowing costs are likely in Africa, given rising oil prices
Rising import bills for oil products could lead to higher domestic inflation due to weakening currencies and increased costs for transport, food and other goods.
Recent history supplies examples of what might happen. South Africa’s annual inflation rate surged in the months after Russia invaded Ukraine and sent oil prices higher. Inflation increased 2.1 percentage points (from 5.7% to 7.8%) in just five months, with food inflation reaching 10.1% by July 2022, driven by grains, cooking oils, and fish and meat.
This ultimately led to higher borrowing costs as well. To counter inflationary pressures, the country’s central bank lifted interest rates by 4.25 percentage points in the 15 months after the Russia-Ukraine war began.
A similar scenario could play out if oil prices remain high during the current conflict in the Middle East. Traders already expect that South Africa’s interest rates will be raised in the months ahead, whereas they had expected cuts before the war started. Further, fuel prices are expected to rise dramatically owing to the weaker South African rand and higher oil price.
The combination of high inflation and high borrowing costs would be a blow to households and businesses across Sub-Saharan Africa, and emphasises the need for governments to reduce their reliance on volatile global fossil fuel markets.
The current crisis shows why gas is risky
While the region’s risk exposure is currently dominated by oil imports, some countries plan to start purchasing large volumes of liquefied natural gas (LNG) as well, which could exacerbate future shocks. South Africa, for example, aims to develop an LNG import terminal and a fleet of gas-fired power plants. This is despite long lead times and rising costs for gas turbines globally.
If the first phase of South Africa’s inaugural LNG terminal was already online and operating at its 2 million-tonne capacity, the LNG import bill to supply it would have surged from USD 1.1 billion in 2025 to USD 1.6 billion this year, assuming current European benchmark prices hold, according to our calculations.22025 estimate based on Dutch Title Transfer Facility (TFF) benchmark for 2025 of USD 12.06/MMBtu, and 2 million tonnes of LNG equating to 92,810,000 MMBtu or 27,193,330 MWh. 2026 estimate based on TFF price of USD 55.09/MWh as of 9 March.
This is an unnecessary risk, according to a recent analysis by Ember, which shows that solar, paired with battery storage, outcompetes gas in sunny countries like South Africa, particularly when the fuel must be imported. The two technologies alone could feasibly cover 95% of the power requirements of the country’s largest city, Johannesburg, per Ember’s modelling.
Other countries have similar LNG ambitions. Ghana, for instance, has constructed its first LNG terminal near Accra. Once operational, the facility’s 1.7 million tonne-a-year capacity would represent an annual import price tag of up to USD 1.3 billion, based on current market dynamics.3Estimate based on TFF price of USD 55.09/MWh as of 9 March, multiplied by 1.7 million tonnes. This would act as a further drain on the country’s international reserve holdings and domestic currency.
Ethiopia’s promotion of electrified transport offers a model for risk reduction
In January 2024, Ethiopia announced a ban on imports of vehicles powered by oil products to support the government’s objective to reduce its substantial fuel import bill. To promote electric vehicle purchases, Ethiopia offers tax exemptions and has worked to encourage local EV manufacturing.
EVs now account for nearly 6% of all vehicles on the road in the country, which is well above the global average of 4%.
Aside from reducing their exposure to global oil market dynamics by electrifying their transport networks, Sub-Saharan African nations can shield themselves from gas supply shocks by favouring renewable energy paired with battery storage over gas-fired power plants.
This piece was updated on 9 March 2026 to reflect updated data on imports and LNG prices.
