Most African governments are betting that the Iran shock will be short-lived. African leaders are hoping that modest policy tweaks will help them weather a crisis that has lifted oil prices, halted fertilizer supplies, and choked shipping traffic. That assumption is shaky, at best, and could prove very costly.
Given this uncertainty, we developed a bespoke AI model to run a key assumptions check — a structured analytic technique used by the US intelligence community — on 81 economic measures across 37 countries. The results reveal a significant vulnerability to a prolonged shock.
Nearly half of the continent’s countries have assumed the crisis will fade and have either limited themselves to symbolic measures or stayed on the sidelines. Senegal, for example, has banned nonessential foreign travel by ministers to cut costs.
A second group of countries, representing about a third of the region’s governments, has assumed it has the funds to outlast the crisis and is asking national treasuries to absorb the costs. Egypt, Ethiopia, Ghana, and South Africa, for example, are trying to shield the public by cutting fuel taxes, subsidizing diesel and cooking fuel, and capping bread and electricity prices.
A third set, exemplified by Madagascar, South Sudan, and The Gambia assumes that any public backlash will be mild and short, and is passing on the costs to their citizens such as rationing power, or issuing anti-gouging directives.
The final cohort is the smallest and includes Mauritius and Rwanda, which are both seeking an external lifeline from the International Monetary Fund or sovereign partners such as India, assuming that international disbursements or alternative supply chains will save the day. It is not clear whether others have availed themselves of the African Export-Import Bank’s $10 billion Gulf Crisis Response Programme.
What becomes alarmingly evident through the key assumptions check is how many of the current responses expect a quick resolution of the conflict — a supposition that is unsound, or at least unsupported. The International Energy Agency judges that even a scenario of regularized Middle East oil and gas exports by mid-2026 could prove too optimistic.
And almost no government has addressed the parallel fertilizer shortage that threatens the next planting season. African nations are still over-dependent on imported fertilizer. With the Strait of Hormuz handling nearly a third of global fertilizer trade, its closure will curtail access and ratchet up costs for many African farmers, especially in East Africa, which is especially reliant on the Gulf. Experts are already warning that there may not be enough fertilizer for the next harvest season, presaging lower yields and higher prices. Even if fuel markets stabilize, the agricultural damage may already be locked in.
That should be an alarm bell for African capitals. Aside from the last of our four groupings, few countries appear prepared for a prolonged economic crisis. As of yet, they are avoiding the bold steps needed to buffer their economies from continued global disruptions. They are not taking heed of the IMF’s warning that the Iran conflict, if it continues unabated, will “further lift prices and trigger a risk-off episode, sharply raising borrowing costs and forcing abrupt adjustment in countries with large refinancing needs.”
There is still time to change. This is the moment to pursue greater regional integration and diversification, as well as supply-chain resilience through local refineries and production. Unfortunately, most African governments are not preparing for a long shock; they are hoping to avoid one. That is not a sound strategy.
Judd Devermont is an operating partner at Kupanda Capital. He led the White House’s Bureau of African Affairs under US President Joe Biden.
Jerry Laurienti, a former senior intelligence service officer, works at the technology services firm, Leidos and teaches at the Texas A&M University Bush School.