S&P Global has warned that a protracted Middle East conflict could place significant strain on the credit ratings of numerous African nations, given the continent’s heavy reliance on imported oil, fuel, and fertilisers.
The ratings agency’s assessment, released on Wednesday, indicates that elevated import costs would likely fuel inflation while simultaneously weakening fiscal and external positions, potentially triggering negative rating actions. This pressure is expected to be most acute for net energy importers with limited financial buffers to absorb external shocks, a category that includes many of the region’s most vulnerable economies.
The agency noted that while large oil exporters such as Angola, the Republic of Congo, and Cameroon could theoretically benefit from higher global prices, their dependence on imported refined petroleum products would curtail those advantages. Nigeria presents a more nuanced case; analysts suggest its growing domestic refining capacity, centred on the Dangote refinery, could allow it to capture greater benefits than its regional peers. This facility, Africa’s largest with a 650,000 barrel-per-day capacity, may partially alleviate regional supply pressures, though it still requires supplementary fuel imports due to domestic production limits.
Import-dependent nations face a particularly difficult policy dilemma. S&P observed that rising energy costs could force some governments to reinstate costly fuel subsidies that were only recently phased out, reversing hard-won fiscal reforms. Furthermore, the knock-on effect on inflation is expected to increase demand for hard currency, placing downward pressure on exchange rates and raising domestic borrowing costs. The depth of local capital markets, however, may offer a cushion for more developed economies like South Africa, Morocco, and Egypt, which can access more diverse financing sources than their peers.
Beyond energy, the disruption threatens African food security and industrial supply chains. Higher fertiliser prices, driven by the conflict, risk reducing domestic agricultural output and stretching household budgets for an extended period. S&P highlighted a specific vulnerability: the continent’s heavy reliance on sulphur imports from the Middle East, a critical input for manufacturing phosphate fertilisers and for extracting minerals including copper, cobalt, and uranium. Africa holds an estimated 40-45% of its sulphur shipments from that region, meaning any supply disruption could directly impact both farming and mining sectors.
Supply chain re-routing around the conflict zone adds further costs, affecting not only fuel but also exports such as gold and diamonds that typically transit the Middle East. S&P analysts concluded that, broadly, African borrowing costs are set to rise due to heightened global risk aversion, a trend already visible in regional currency performance since the conflict began. This outlook marks a reversal from early 2026, when the agency held a positive view on African sovereign credit following two years of net rating improvements.
Locally, Samira Mensah, S&P’s head for South Africa, told Business Day earlier this week that the country remained on track to maintain its existing rating and positive outlook. However, she cautioned that this position could change ahead of the agency’s next scheduled update on May 29, depending on how severely the war’s economic ripple effects impact South Africa’s key metrics. The agency had upgraded South Africa’s rating in November 2025 for the first time in two decades, citing stronger tax revenues, primary budget surpluses, and reduced risks from state-owned entities such as Eskom.