IMF Slashes Growth Forecasts as Middle East War Hits Africa

The International Monetary Fund (IMF) significantly downgraded growth projections for the Middle East, North Africa, and Sub-Saharan Africa following a conflict that began on February 28, 2026. Triggered by U.S. and Israeli strikes on Iran and subsequent Iranian retaliations, the war disrupted the Strait of Hormuz and damaged energy infrastructure. The IMF slashed the Middle East and North Africa growth forecast to 1.1%, with Iran's economy specifically projected to contract by 6.1% amid a U.S. military blockade of its ports.

In Africa, the conflict created a "quiet catastrophe" by surging costs for fuel and fertilizers. Nigeria saw domestic gasoline prices rise by 50% and fertilizer costs jump 40% during the planting season. The IMF lowered Nigeria's 2026 growth forecast from 4.4% to 4.1% and reduced the broader Sub-Saharan African growth outlook to 4.3%. These shocks are compounded by a structural decline in official development assistance and a pivot by Gulf Cooperation Council nations away from development spending toward military expenditures.

To address these vulnerabilities, the IMF, World Bank Group, and International Energy Agency established a coordination framework on April 1, 2026, to provide tailored financial assistance and policy guidance. Simultaneously, African organizations proposed a two-track debt restructuring approach and the acceleration of the African Continental Free Trade Area to enhance energy independence. While the IMF commended Nigeria and Ethiopia for their 2025 macroeconomic reforms, it warned that the current geopolitical instability threatens to erase those stabilization gains.