Agency Report
Inflation pressures are intensifying across parts of Africa as the economic fallout from the United States (U.S.)-Israel-Iran conflict ripples through global fuel markets, driving up transport and consumer costs in import-dependent economies.
South African inflation accelerated to a 20-month high in April after a sharp rise in fuel pump prices, while Kenya’s inflation climbed to a two-year peak and is expected to accelerate further as fuel-supply disruptions continue to drive up energy and transport costs across the continent.
Brent crude has surged above $99 a barrel amid naval tensions in the Strait of Hormuz—a chokepoint for roughly a fifth of global oil and liquefied natural gas flows—and fears of prolonged disruptions to global shipping routes.
African Governments Are Scrambling To Contain The Fallout
In Kenya, protests over soaring energy costs turned deadly in May before President William Ruto announced emergency diesel price cuts to calm public anger. Senegal has warned that its fuel subsidy bill could explode beyond budget projections if oil prices remain elevated. Botswana’s central bank became the first on the continent to raise interest rates.
The dependence on imported refined fuel, much of it sourced through global supply chains linked to the Gulf, is now driving a new conversation about industrial self-sufficiency and regional integration, one increasingly centered on Africa’s richest man Aliko Dangote and his giant refinery on the outskirts of Nigeria’s commercial capital Lagos.
On May 17, Uganda’s President, Yoweri Museveni, announced on X (formerly Twitter), that he had met Dangote in the Nakasero central neighborhood of the country’s capital Kampala to discuss a proposed East African regional refinery. The meeting came just a day after Tanzania’s President, Samia Suluhu Hassan, hosted Dangote amid growing speculation about the project’s site. Kenya’s President, William Ruto, had earlier suggested that Tanzania was poised to host the investment, though Dangote later indicated that Kenya was also under consideration.
“We cannot continue operating as fragmented and weak markets,” Museveni, whose country is also developing its refinery in Hoima City, dubbed the oil capital in the western region, wrote afterward on X, framing the proposed regional refinery as part of a broader vision for “African integration and shared prosperity”.
Africa’s Exposure To External Crises No Longer Sustainable
Museveni’s post reflects a growing consensus among African policymakers and business leaders.
“Africa must transit from a raw materials base to a manufacturing base. The vulnerability is structural, and so the response must be structural,” says Adeyinka Ogunnubi, President of the Association of Corporate Treasurers of Nigeria (ACTN), to FORBES AFRICA.
Ogunnubi points to the continent’s low levels of intra-African trade—still hovering around 15% of total commerce—compared with more than half within Europe and Asia. Every increase in regional trade, he argues, reduces Africa’s exposure to distant geopolitical flashpoints and volatile shipping corridors.
His prescription is ambitious: accelerate implementation of the African Continental Free Trade Area (AfCFTA), deepen use of the Pan-African Payment and Settlement System (PAPSS) to reduce dependence on the dollar, build strategic reserves for food and fuel, and invest aggressively in refining and manufacturing capacity.
For Ogunnubi, the urgency is becoming harder to ignore.
In Malawi, fertilizer shortages linked to disruptions in global supply chains are threatening farmers already struggling with climate shocks. Piracy is reportedly resurging off Somalia’s coast. Nigeria, Africa’s largest oil producer, has doubled crude supply to the Dangote refinery in an effort to stabilize domestic fuel availability after Gulf shipments became more uncertain.
Even Europe is increasingly relying on African refining capacity. The Dangote refinery has emerged as a critical supplier of jet fuel to European markets seeking alternatives amid Middle Eastern disruptions.
That fragmentation is also reshaping corporate thinking.
Blessing Odetokun, a Nigerian enterprise risk management officer, says the crisis underscores the need for African governments to accelerate renewable energy development, modernize agriculture and strengthen internal security around critical infrastructure.
“If these internal weaknesses are not addressed, then external shocks will continue to have an increasing impact,” he tells FORBES AFRICA.
Opportunity Amid The Disruption
Alex Apau Dadey, founder of the Ghanaian conglomerate KGL Group, argues that the retreat toward nationalism and economic protectionism among major powers should push African companies to become more globally ambitious rather than more defensive.
“African companies should also expand internationally and repatriate value back home. That is how true economic balance is created,” he shares with FORBES AFRICA