How will the Middle East conflict affect Africa

The jump in global energy prices on the back of the conflict in the Middle East, if sustained, will provide a windfall for Africa’s key oil producers, such as Nigeria and Angola. We suspect most of this will be saved given their fragile public finances, although some of it could be spent on pre-election giveaways and, in Angola, on fuel subsidies. Elsewhere, higher energy prices will weigh on balance of payments positions, with Kenya and Uganda particularly vulnerable. Inflation will rise in most places, prompting central banks – including the South African Reserve Bank – to adopt a more cautious approach to further monetary easing.