The Middle East conflict is putting significant strain on energy and food systems across Africa, which could threaten credit ratings on the continent, S&P warned.
Several governments have already tightened fiscal policy, leaving them with few options if the situation continues to deteriorate, the credit agency warned.
Key fuel and fertilizer exports have been all but blocked by disruption in the Strait of Hormuz, with the worst effects expected to hit import-dependent African economies in six to 18 months, S&P said. Food makes up more than 50% of household spending in most African nations, with Madagascar facing the highest risk followed by Benin, Mozambique, and Guinea.
Several nations, including Comoros and Kenya, have also seen steep fuel cost hikes that sparked deadly protests and forced governments to walk back price increases — and underscore broader economic vulnerabilities. “If the energy shock persists, the impact would broaden into wider credit deterioration, with narrowing fiscal and monetary policy space,” S&P said.
