Africa in need of a robust strategy to mitigate conflicts

IOL News

a day ago

An Islamic Revolutionary Guard Corps (IRGC) speed boat is sailing along the Persian Gulf during the IRGC marine parade to commemorate Persian Gulf National Day, near the Bushehr nuclear power plant in the seaport city of Bushehr, Bushehr province, in the south of Iran, on April 29, 2024.
Dr Sizo Nkala
The global shocks Africa has had to deal with have been coming fast and furious in recent years.
The COVID-19 pandemic, the Russia-Ukraine war and the re-election of Donald Trump as the US President in 2024 are some of the external shocks that have had a massive impact on Africa's economic standing and prospects. As the continent was still trying to find its feet from the devastation caused by these geopolitical wrecking balls, another, potentially more devastating one, suddenly emerged on the horizon.
On the 14th of June, the world woke up to the news of Israel's surprise attack on its long-time foe, Iran in the so-called Operation Rising Lion. The Jewish state deployed hundreds of its warplanes over the Iranian skies dropping bombs on the Islamic Republic's nuclear and other military facilities while also targeting key military leaders and nuclear scientists.
Israeli Prime Minister Benjamin Netanyahu justified his country's actions arguing that Iran was rapidly moving towards developing a nuclear weapon which would have presented an existential threat to Israel. Netanyahu said Israel was therefore carrying out pre-emptive strikes to prevent Iran from obtaining a nuclear weapon.
As expected, Israel retaliated with a barrage of missiles striking different cities in Israel proclaiming the right to defend itself. The latest attacks mark a significant escalation of long-simmering tensions between the Middle East's two largest and most powerful militaries.
The two countries exchanged limited attacks in April and October last year over Israel's assassination of the Hamas leader, Ismail Haniyeh, in Iran, the Hezbollah leader Hassan Nasrallah and the leader of the Iran Revolutionary Guard Council (IRGC) Abbas Nilforoushan.
The United States also joined the war on the side of Israel after Donald Trump ordered the bombing of three nuclear sites in Iran on June 21. Although the three countries - the US, Iran and Israel have agreed to a ceasefire – it is not certain how long the ceasefire will last.
A major war between the powerhouses in a region responsible for 26 per cent of global oil production is certain to have a catastrophic impact on the global economy from which no region, including Africa, would be spared. Immediately after the beginning of the conflict oil prices went up 7 percent because of the uncertainty over continued supplies from the Middle East.
Following the US attack, the Iranian parliament approved a move to close the Strait of Hormuz. Iran's Supreme National Security Council had to make the final decision. The strait is a critical maritime chokepoint about 33 kilometers wide which connects the Persian Gulf to the Indian Ocean.
About 20 per cent of the world's oil supplies – 20 million barrels – passes through the strait every day. Iran controls the north bank of the Strait of Hormuz while the south bank is in Omani territory. Major oil producers in the Middle East like Saudi Arabia, Kuwait, Iraq, the United Arab Emirates, and Qatar depend on the Strait of Hormuz for their oil exports.
While the world's oil supply has become significantly diversified ever since the development of the fracking technology which has seen the US become the world's largest oil producer, the closure or disruption of Hormuz chokepoint would have sent the oil prices through the roof. As a result, Africa's annual fuel import bill of approximately US$30 billion would have ballooned triggering a major economic fallout.
The increase in consumer inflation would have put the price of basic commodities beyond the reach of many thus exacerbating poverty, food insecurity and the risk of instability. It is not only through the disruption of oil supplies that Africa would have suffered had Iran followed through on its resolve to close the Strait of Hormuz.
About 20 per cent of global liquefied natural gas supplies go through the Strait of Hormuz. As LNG is a major input in the production of fertilizer, the decline in fertilizer supply would increase its prices with a negative impact on food production in Africa which imports 90 percent of its fertilizer consumption.
Fertilizer prices have increased by almost three times since 2020 due to the Covid-19 pandemic and the Russia-Ukraine war which made the critical input out of reach for the majority of Africa's small-scale farmers. Another increase would have spelt disaster for the continent's struggling agricultural sector which would have worsened food shortages.
Indirectly, the closure of the Strait of Hormuz would hit China the hardest as the Asian giant imports about 5 million barrels of oil per day through the strait. The economic damage this would cause in China would be felt in Africa as China is by far Africa's biggest bilateral trade partner. Approximately 20 per cent of Africa's exports are destined for China.
Chinese demand for African exports would be drastically reduced further diminishing African countries' revenue generation. All this is counterfactual now because Iran did not follow up on its threat to close the Strait of Hormuz. And the world should be thanking its stars.
However, it would be foolhardy to believe that the temporary truce between Israel and Iran will hold indefinitely. Should there be a re-escalation of hostilities, Iran's closure of the critical chokepoint cannot be ruled out especially if such a development can be spun as a consequence of Israel's act of aggression.
It is important that Africa prepares for a worst-case scenario and enhances the resilience of its economy against the impact of global shocks.
* Dr. Sizo Nkala is a Research Fellow at the University of Johannesburg's Centre for Africa-China Studies.
** The views expressed do not necessarily reflect the views of IOL, Independent Media or The African.