Nairobi — The effects of the conflict in the Persian Gulf are beginning to be felt worldwide. In addition to the impact on energy markets caused by the closure of the Strait of Hormuz, one of the less well-known but no less serious consequences affects African economies. This applies not only to macroeconomic effects such as inflation, rising energy prices, and budget cuts, but also to the exports of smaller producers, particularly in the food sector.
The problems are not limited to a single country or region, but affect all major African economies. Consider, for example, South Africa, Egypt, and Kenya. In Kenya, for instance, meat exports to the Gulf States are among the sectors suffering as a result of the conflict. The region is Kenya’s most important market for meat, with the United Arab Emirates alone accounting for 40 to 60% of exports. Other recipient countries include Oman, Kuwait, Bahrain, and Jordan, all countries where sales have declined due to the conflict. Nicholas Ngahu, head of the Kenyan Association of Meat and Livestock Exporters, told Reuters that the industry as a whole has reduced its exports by 15%, with sales falling by a further 5% during periods like Ramadan. Transportation costs are exacerbating the situation. According to Dennis Muraya, director of the shipping company Konza Clearing Agency, who was also interviewed by Reuters, the cost of shipping a kilogram of meat to the region has almost tripled due to increased insurance premiums. This has led to a significant drop in the volume of meat shipped daily.
The concern for the future is that the continuation of the war will further reduce sales, which the domestic market cannot absorb, delivering a near-final blow to the sector.
Keep up with the latest headlines on WhatsApp | LinkedIn
In the case of South Africa, the agricultural sector, particularly fruit production, is suffering as a result of the conflict. According to data from the South African organization Hortgro, which analyzes the sector, and reported by Scrolla, 21% of South African pear exports, 12% of apple exports, 60% of apricot exports, 34% of peach exports, 17% of nectarine exports, and 12% of plum exports go to the Middle East. The war has also led to a number of problems with goods already shipped from South Africa, which have been blocked on their way to their destination markets. Cargoes ready for loading have been destroyed. Here, too, alternative markets and the domestic market cannot meet demand, putting the entire sector at risk. The problem is exacerbated by the strained oil supply situation. In 2024, South Africa imported a total of 69% of its oil and diesel from Oman, the United Arab Emirates, Saudi Arabia, and Bahrain. The blockade of the Strait of Hormuz, if it continues, would pose an enormous threat to the country’s economy.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
Egypt faces similar problems. There are fears of both economic and social consequences: The government has been forced to cap the price of non-state-subsidized bread from private bakeries. This measure was taken due to increased inflationary pressures caused by the conflict, which have also led to higher fuel prices. The economic impact could be even more far-reaching, as it is expected to affect transportation and production costs as well. The country also faces a significant problem in its financial markets: Since the start of the conflict, sales of government bonds–estimated at five to eight billion dollars in value–have come to a standstill. This is worrying news for the Egyptian economy: Government bonds are used to finance government interest payments, which are themselves being impacted by double-digit inflation. Should this trend continue and inflation rise further as a result of the conflict, Egypt faces an economic crisis with potentially severe and unpredictable social consequences.