A deepening crisis in the Middle East could send economic shockwaves across sub-Saharan Africa, raising fuel costs, food prices and inflation across the region, according to a new analysis by energy consultancy Zero Carbon Analytics. Roughly one-fifth of the world’s oil and liquefied natural gas flows through the Strait of Hormuz between Iran, Oman and the UAE. If the ongoing conflict continues, energy prices could spike, driving up costs across African economies, which heavily rely on imported oil and gas. “As a net importer of oil products, sub-Saharan Africa will not be immune from the fallout,” the analysis notes, warning that higher energy prices could increase the cost of imports and put pressure on national currencies and foreign reserves. The report analyzed import data and cash reserves across 29 African countries and found Senegal, Benin, Eritrea, Burkina Faso and Zambia are among the most vulnerable if oil prices remain elevated. These countries combine high dependence on imported fuel with limited foreign currency reserves, meaning they will quickly run out of money to pay for more expensive fuel. “The countries that are most exposed rely entirely on oil imports and already have low levels of international reserves,” Nick Hedley, who authored the analysis, told Mongabay. “This means when oil prices rise, these countries risk further depleting their holdings of U.S. dollars, gold and other reserves. This further weakens their currencies, making imports of all goods more expensive, which pushes up inflation.” The ripple effects could extend beyond fuel. Rising oil and…This article was originally published on Mongabay

From Conservation news via This RSS Feed.