What the Strait of Hormuz closure means for African economies

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OPINION

By Ahmed Hadji

When tensions rise in the Strait of Hormuz, a narrow waterway linking the Persian Gulf to the Indian Ocean, where Iran borders it and has effectively restricted access during the conflict, many focus only on oil prices. Yet the March 2026 crisis involving the US, Israel and Iran reveals a deeper truth: This passage undergirds global trade, sustaining food systems, industries and African economies. The most immediate and least understood impact is on food security.

The Gulf region is a major producer of nitrogen-based fertilisers such as urea and ammonia, which are key inputs for agricultural productivity. Nearly one-third of global seaborne fertiliser exports pass through the Strait of Hormuz.

With the route effectively closed, shipments are delayed or stranded, creating uncertainty in global markets. For countries like Uganda, where agriculture underpins livelihoods and food supply, this could mean reduced harvests, rising prices and greater pressure on vulnerable communities.

Equally significant is the disruption to industrial supply chains. Hormuz is a key transit route for aluminium, sulphur and chemicals essential for manufacturing. Approximately 13% of global chemical trade passes through it. As supplies tighten and costs rise, African economies expanding under the African Continental Free Trade Area face considerable constraints, with delays and higher production costs slowing industrial growth.

The crisis is also disrupting global trade and logistics. The Gulf is a major transhipment hub linking Asia, Europe and Africa, with facilities such as Jebel Ali Port playing a key role. Vessel rerouting and congestion are already causing delays, higher prices and limited availability of essential goods across African markets.

Beyond these visible disruptions lies a more subtle but dangerous effect: Inflation. The closure of Hormuz is effectively acting as a hidden tax on the global economy. Shipping costs have surged as vessels take longer routes, while fuel prices continue to rise. At the same time, maritime insurance premiums have increased sharply due to heightened security risks. For African economies, many of which are already grappling with debt burdens and currency volatility, this combination fuels imported inflation, reduces purchasing power and complicates recovery efforts.

Yet within this crisis lies a critical opportunity. The growing shift by some African countries to source refined petroleum from the Dangote Refinery in Nigeria is a strategic step forward. By relying on a continental supplier rather than distant and vulnerable global routes, these countries are beginning to reduce their exposure to geopolitical shocks such as the Hormuz disruption.

The Dangote model, driven by industrialist Aliko Dangote, offers a powerful blueprint. For decades, many African countries have exported crude oil only to import refined petroleum at higher costs — a paradox that drains foreign exchange and entrenches dependency. Building domestic and regional refining capacity breaks this cycle. It strengthens energy security, stabilises supply, creates jobs and supports broader industrial development.

More importantly, investing in local refining capacity aligns with Africa’s long-term development goals. It promotes value addition, reduces import bills and complements the ambitions of the AfCFTA by encouraging intra-African trade. In times of global disruption, countries with domestic refining capacity are far better positioned to cushion their economies from external shocks.

For policymakers, the message is clear. Africa must move beyond being a supplier of raw materials and a consumer of finished products. Strategic investments in refineries, fertiliser plants and industrial infrastructure are no longer optional — they are essential for economic sovereignty. Regional co-operation will also be critical, ensuring that smaller economies can benefit from shared infrastructure and integrated markets.

Ultimately, the Strait of Hormuz is far more than an oil passage — it is a lifeline of the global economy. Its closure has exposed how deeply interconnected the world has become and how quickly disruptions can ripple across borders. For Africa, the lesson is urgent: Resilience, self-reliance and strategic foresight must define the continent’s next phase of economic and foreign policy thinking.

The writer is a foreign affairs analyst, an adjunct senior fellow with the Centre for Policy and Strategic Studies Africa and the provost at the Lincoln Institute for Diplomacy and International Relations, Kampala