The escalation of tensions between the United States and Iran has sent shockwaves across global markets, with oil prices surging by over 50 per cent as of late March, triggering widespread currency volatility across Africa.
A joint assessment by the African Union and the African Development Bank revealed that at least 29 African currencies have weakened in the wake of the crisis, significantly raising the cost of servicing external debts and importing essential commodities such as food, fuel and fertiliser.
The report warned that the rapid pace and concentration of the shock have constrained policymakers’ ability to respond effectively. For households and businesses, the impact is already evident, with rising inflation, declining purchasing power and tightening financial conditions.
According to data from African Markets, a real-time tracking platform, several currencies have recorded steep declines amid the ongoing Middle East conflict.
Egyptian Pound Leads Decline
The Egyptian pound recorded the sharpest fall on the continent, depreciating by 10.9 per cent against the dollar—from £47.95 on March 1, 2026, to £53.28 on April 9.
The sharp drop reflects mounting external financing pressures and the country’s vulnerability to global energy price swings. Inflationary pressures have also intensified, with annual inflation rising to 15.2 per cent in March, up from 13.4 per cent in February, underscoring the rapid pass-through effect of exchange rate depreciation on consumer prices.
Botswana Pula Shows Relative Stability
The Botswana pula weakened by 5.14 per cent, moving from BWP13.22 to BWP13.90 within the same period.
Despite the depreciation, Botswana’s relatively low inflation rate points to a degree of macroeconomic resilience compared to its regional peers.
Ugandan Shilling Under Pressure
The Ugandan shilling declined by 3.15 per cent, slipping from Ush3,586 to Ush3,699 per dollar.
Market analysts attribute the steady weakening to increased demand for foreign exchange by energy importers, reflecting rising import bills and sustained pressure on dollar liquidity.
Ghana Cedi Faces Renewed Strain
The Ghana cedi depreciated by 3.8 per cent, from ₵10.69 to ₵11.10 against the dollar.
Although inflation eased for the 15th consecutive month in March, renewed increases in global fuel prices linked to Middle East tensions have exposed underlying structural vulnerabilities. Analysts note that the country’s dependence on imports and exposure to external financing conditions continue to weigh on the currency.
Tanzanian Shilling Slips Despite Low Inflation
The Tanzanian shilling fell by 3.04 per cent, weakening from TSh2,527.16 to TSh2,604 per dollar.
This occurred despite a stable inflation rate of 3.2 per cent in March. However, heightened demand for foreign exchange—particularly for fuel imports—amid the geopolitical tensions has exerted downward pressure on the currency.
Across the continent, analysts warn that sustained volatility in global oil markets could further strain African economies, deepen inflationary trends and complicate fiscal and monetary policy responses in the months ahead.
