Mohale FM African Union (AU) says the Middle East conflict could intensify competition for influence in Africa especially with the United States (US), Gulf states, China, Russia, Iran and Turkiye.
The union has also observed that the crisis could also raise humanitarian delivery costs to Sudan and Somalia, worsening conditions in the Horn of Africa, and in addition, donor priorities may also move further toward military spending and crisis response closer to the conflict zone, adding pressure on already constrained humanitarian and development financing for Africa.
It says this will include efforts to strengthen tax administration, broaden the revenue base, deepen domestic capital markets, and expand the use of instruments such as diaspora bonds, blended finance, and thematic sovereign issuances, adding that Africa must accelerate the reform of its financial architecture, using the principle of subsidiarity to deepen collaboration among African financial institutions and mobilize development finance at greater scale.
The AU added that there is need to build African financial safety nets by deepening domestic capital markets, reforming the African financial architecture, and developing shock-response instruments such as crisis facilities and debt-service swaps.
African countries have felt the pinch of the Middle East conflict through recent fuel increase which economists say is likely to last at least until the second quarter of the year.
