The war in Iran has dealt a “severe blow” to Africa’s fragile economic recovery, according to the latest IMF Regional Economic Outlook. After a strong 2025, regional growth forecasts for 2026 have been slashed to 4.3%, with median inflation projected to climb to 5%. The conflict is battering the continent through several factors, including surging production costs driven by high oil prices, a strengthening US dollar that has weakened 29 African currencies, and a sharp decline in foreign aid. Furthermore, the war has frozen vital investment and remittance flows from the Gulf, with the UNDP warning that members of the Gulf Cooperation Council (GCC) could lose 8.5% of their GDP, directly impacting the 3.6 million African workers in the region. With 22 African countries already in or near debt distress, the war places a strain on the continent’s economies.
African Business
