Rising U.S.-Iran Tensions Propel Oil Prices and Affect African Currencies
Recent rising tensions between the United States and Iran have caused global oil prices to escalate by over 50% as of the end of March. This surge has triggered significant currency fluctuations across various African markets.
A joint assessment by the African Union and the African Development Bank reveals that at least 29 African currencies have depreciated. This depreciation is resulting in higher costs for servicing external debt and importing essential goods, including food, fuel, and fertilizer.
The report highlights that the speed and intensity of this economic shock afford policymakers limited options. Households and businesses are already feeling the repercussions, with rising inflation eroding purchasing power and tightening financial conditions across the continent.
The following five African currencies have experienced the steepest declines amidst the ongoing conflicts in the Middle East, as tracked by the real-time data platform Africa Markets.
Egyptian Pound
Against the dollar, the Egyptian pound fell by 10.9%, dropping from £47.95 on March 1, 2026, to £53.28 by April 9, 2026. This remarkable depreciation makes the pound the most impacted currency in Africa, primarily due to heightened external financing pressures and its sensitivity to global energy costs.
As the currency weakens, inflation in Egypt is accelerating. Official data indicates that the annual inflation rate surged to 15.2% in March 2026, up from 13.4% in February, demonstrating the rapid impact of the exchange rate decline on consumer prices.
Botswana Pula
The Pula’s value diminished by 5.14%, moving from BWP13.22 on March 1, 2026, to BWP13.90 on April 9, 2026. Despite this modest depreciation, Botswana’s relatively low inflation rate suggests some resilience compared to its regional peers.
Ugandan Shilling
Shifting to the Ugandan shilling, its value against the dollar fell by 3.15%, from Ush3586 on March 1, 2026, to Ush3699 on April 9. This steady depreciation is largely attributed to strong demand from energy importers, which reflects increased pressure to settle import bills and an uptick in demand for dollars.
Ghanaian Cedi
The Ghanaian cedi lost ground too, decreasing by 3.8% from ₵10.69 on March 1, 2026, to ₵11.10 by April 9, 2026. While Ghana’s inflation rate fell for the fifteenth consecutive month in March 2026, the cedi continues to grapple with structural challenges, exacerbated by rising fuel prices stemming from the regional turmoil.
Tanzanian Shilling
Lastly, the Tanzanian shilling declined by 3.04%, dropping from TSh2527.16 on March 1, 2026, to TSh2604 on April 9. Despite a stable inflation rate of 3.2% as of March 2026, the shilling is under considerable pressure due to the conflict between the U.S. and Iran, particularly affecting fuel prices and increasing demand for foreign currency.
