The Hormuz crisis: Shocks and tremors call for greater economic resilience
Priestly says the first and most visible impact is at the fuel pump. Higher energy prices are being felt directly by businesses and consumers. Fuel prices have tripled in Ethiopia and risen sharply in several other regional markets, including Rwanda, Tanzania and Uganda.
Mark Priestly, the TradeMark Africa Senior Director, Trade Environment
By Mark Priestley
A crisis in the Strait of Hormuz may seem far removed from the daily concerns of East Africa. Yet its effects are already being felt at fuel pumps, ports, farms, border posts and along the transport corridors that connect the region to global markets.
Since late February, geopolitical tensions constraining trade through Hormuz have sent shock waves through energy, fertiliser and logistics markets.
The strait is one of the world’s most important maritime chokepoints, carrying roughly a fifth of globally traded oil in normal times. It is also linked to the wider Gulf supply chains that matter deeply to fertiliser and refined fuel markets. For East Africa and the Horn, which rely heavily on imported fuel, agricultural inputs and essential goods, the tremors are immediate.
The first and most visible impact is at the fuel pump. Higher energy prices are being felt directly by businesses and consumers. Fuel prices have tripled in Ethiopia and risen sharply in several other regional markets, including Rwanda, Tanzania and Uganda.
These increases are not just an inconvenience for motorists. Diesel powers the trucks that move goods from Mombasa, Dar es Salaam and Djibouti into inland markets. It runs generators, cold rooms, construction sites, farms and small businesses. When diesel rises, the cost of almost everything else begins to rise with it.
The result is a wider economic squeeze. Higher fuel costs feed inflation, raise transport prices, weaken household purchasing power and increase pressure on currencies and balance-of-payments positions.
The burden falls most heavily on poorer households, which spend a larger share of income on food, transport and basic energy. For them, a global energy shock quickly becomes a daily cost-of-living crisis.
The second channel is fertiliser. Urea prices have risen sharply, and the World Bank’s April 2026 Commodity Markets Outlook projects a significant increase in fertiliser costs.
This matters because many African farmers already face high input prices, limited access to finance and climate-related uncertainty.
If fertiliser becomes unaffordable or unavailable at the right time, farmers may reduce application rates or delay planting. Lower yields would then feed directly into higher food prices and greater food insecurity.
This is how an energy crisis becomes a food crisis. Higher fuel prices raise the cost of moving food. Higher fertiliser prices raise the cost of producing food. Higher shipping and logistics costs raise the cost of importing food.
Together, these pressures threaten the next growing seasons and risk pushing more households into hunger.
The third channel is logistics. Insecurity in the Middle East and higher fuel prices have increased the cost of both maritime and land transport. Disruptions around Hormuz, combined with continued pressure on the Suez and Red Sea route through Bab el-Mandeb, have encouraged more vessels to reroute around the Cape of Good Hope.
This adds time, fuel, crew costs and uncertainty. Insurance premiums have also risen as carriers price in higher risk.
For East Africa, these costs do not stop at the port. They move inland through trucking rates, warehousing costs, demurrage, border delays and working capital requirements.
A container that costs more to land at the coast becomes more expensive again as it travels to Kampala, Kigali, Bujumbura, Juba or eastern DRC.
What is unfolding is therefore not simply a temporary supply shock.
It is exposing structural vulnerabilities that businesses in the region navigate every day. East Africa remains dependent on imports of critical goods, including refined fuels, agricultural inputs and manufactured products, while many exports remain concentrated in primary or lightly processed commodities.
When an external shock hits, the impact travels quickly through the economy: a fuel price increase at the coast becomes higher transport costs inland, which then feeds into retail prices, production costs and the competitiveness of firms.
This trade profile points to a deeper challenge: limited economic diversification and relatively low levels of manufacturing.
It is also reflected in Africa’s low level of internal trade. Intra-African trade still accounts for only around 15 to 16 percent of Africa’s total trade, leaving the continent heavily dependent on external markets and exposed to global shocks in fuel, fertiliser, food and shipping.
If instability around Hormuz, the Red Sea and the Gulf persists over the medium term, the case for resilience becomes stronger.
This is not about turning inward or retreating from global trade. It is about building economies that can absorb external shocks without each crisis becoming a full transmission belt into inflation, food insecurity and fiscal pressure. Three pathways stand out.
One pathway is stronger energy security. East Africa cannot eliminate dependence on imported refined fuel overnight, but it has options to reduce the direct transmission of global oil shocks into domestic economies.
Electric mobility can be viewed not only as a climate agenda, but also as a trade and energy-resilience agenda. The near-term opportunity may lie in commercial fleets, buses and trucks operating along major corridors, where diesel dependence is highest.
Ethiopia and Rwanda are already showing that electric mobility can move from ambition to implementation. Scaling this further would depend on corridor charging infrastructure, common standards, reliable electricity and financing models such as leasing, pay-per-use and blended finance.
Energy security also points to faster investment in renewables, transmission and regional power trading. East Africa and the Horn have abundant hydro, geothermal, wind and solar potential.
Scaling these resources, together with stronger cross-border transmission and regional electricity markets, could reduce reliance on imported fossil fuels and allow surplus power in one country to support deficits in another.
The region may also explore commercially viable and environmentally responsible refining and downstream energy investments. The Dangote refinery in Nigeria shows how domestic refining can reduce dependence on imported refined products.
For East Africa, emerging discussions around regional refining capacity point to the importance of connecting energy security with industrial policy.
A second pathway is industrialisation and more targeted investment. The region’s vulnerability is not only caused by what it imports, but also by what it does not yet produce.
Exports remain too concentrated in primary and low-value products, while imports include many of the manufactured goods, processed foods, fertilisers, pharmaceuticals, fuels and intermediate inputs needed to run modern economies.
There may be value in prioritising investment into sectors that reduce import dependence, expand exports and build regional value chains.
These include agro-processing, fertiliser blending and production, pharmaceuticals, textiles and garments, packaging, construction materials, renewable-energy components, e-mobility components and logistics services.
Special economic zones and industrial parks can support this agenda where they are linked to ports, corridors, reliable power, skills and regional markets.
The AfCFTA provides a platform, but its benefits will depend on goods moving quickly across borders, workable rules of origin, harmonised standards, fewer non-tariff barriers and digital, risk-based customs systems.
East Africa has an opportunity to use trade policy and industrial policy together to capture more value at home.
A third pathway is stronger food trade corridors. Africa has substantial agricultural potential, yet it remains a net importer of many staple foods. At the same time, some regions produce surpluses while others face deficits.
The weakness lies not only in production, but in the systems that move food from where it is produced to where it is needed.
East Africa could strengthen food corridors linking surplus-producing areas in Tanzania, Uganda, western Kenya, Ethiopia, Rwanda and the wider Great Lakes region to deficit markets in the Horn, landlocked countries and fast-growing urban centres.
There is also scope to improve links with Southern Africa, where surplus production can help stabilise supply during droughts or price shocks.
This would require investment in storage, aggregation centres, cold chains, warehouse receipt systems, market information, predictable border procedures and reduced non-tariff barriers.
Stronger sanitary and phytosanitary systems would also help food move faster while still protecting consumers and farmers. If Africa can trade more food with itself, it can reduce exposure to external food-price shocks, support farmers, stabilise markets and improve food security.
The Hormuz crisis is a warning, but it is also an opportunity. It highlights how quickly external shocks can travel through fuel prices, freight costs, fertiliser markets and food systems.
Yet it also points to a more resilient future: one in which East Africa strengthens energy security, deepens regional food trade, expands industrial production and attracts investment into value-adding sectors.
TradeMark Africa can support governments and the private sector in this transition by continuing its core trade facilitation work to keep transport and trade costs down.
That means improving corridor performance, reducing avoidable delays at ports and borders, supporting digital trade systems and helping essential goods move more predictably.
But it also means helping the region trade more with itself, unlock market access, crowd in investment and support African firms to move up the value addition ladder.
When Hormuz shakes, East Africa feels the tremor. The task now is to ensure that future shocks are absorbed by a region that is more diversified, more connected and more resilient.
The writer is the Senior Director for Trade Environment, TradeMark Africa