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- Author, Marco Oriento
- reporting from, London
- Author, Makuochi Okafor
- reporting from, lagos
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As the war on Iran continues, contributors across Africa are feeling the impact. Some are lost due to high oil prices and closed shipping lanes, but ODA benefits from new trade routes.
Nigeria: oil rich but squeezed
Nigeria is the second largest oil producing country in Africa after Libya. With the price of crude rising, Nigerian officials have signaled they may pump more oil to help respond to global demand.
But even if the Nigerian government does not do so, ordinary Pipo will not benefit due to the country's insufficient oil refining capacity.
Nigeria ships most of the crude oil abroad to be converted into diesel, petrol and ODA products, and brings them back at global prices.
As many shipments through the Strait of Hormuz to Iran are halted, prices of petroleum products for Nigeria are also affected, eliminating profits from selling oil.
“If international petrol prices go up, transportation costs everywhere go up,” said Dumbe Oluwole, a sabi pesin for Tel Mata Tok.
“Fuel almost doubles, if not triples,” said Moronmubo Akodu, a small business owner in Lagos Tok.
“I try to work only when absolutely necessary so I can manage costs.”
In addition to fuel costs, food is likely to become more expensive and inflation will worsen, leading to an all-round increase in the cost of living.
While the government may earn more from oil exports, many Nigerians will face higher living costs in the near future.
Egypt: Suez under pressure
As shipping routes become disrupted, Egypt is already losing revenue from the ongoing war.
The Dia Suez Canal is the major route for ships carrying oil and ODA cargo between the Gulf and Europe.
Since the start of hostilities, major shipping companies diverted ships from both the Strait of Hormuz and the Red Sea due to missile and drone attacks.
The crisis has sharply reduced traffic and revenues for the Suez Canal, making imports more expensive and raising prices at home.
“The Egyptian pound has declined by almost 7%,” said economic sabi pesin Dumbi Oluwole.
“The middle of the Suez Canal, which is the major route for the movement of almost all crude oil and ODA goods to Europe, is essentially blocked.”
South Africa: more business potential
However, further south, some African economies are seeing new opportunities.
Maersk and Hapag-Lloyd, one of the world's largest container shipping companies, have announced for March this year that they will re-route some key Middle East services around South Africa's Cape of Good Hope.
As tankers and container ships avoid the Strait of Hormuz and the Red Sea, more ships are moving around the southern tip of Africa, creating new port opportunities for the region, particularly South Africa.
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“The new, longer routes have put considerable pressure on many of Southern Africa's offshore port areas – Walvis Bay, Cape Town, Durban, Maputo, Dar es Salaam,” said Timothy Walker, senior researcher at the DI Institute for Security Studies.
In early March, the South African Cape Chamber of Commerce and Industry reported a 112 percent increase in the number of ships calling at the Port of Cape Town.
“While there is potential for business opportunities for bunkering, ship repair and marine supplies, we also find infrastructure constraints,” Jacques Moolman, president of the Cape Chamber of Commerce and Industry, Tok.
Transnet National Ports Authority (TNPA), the state-owned body that manages eight commercial ports, has confirmed plans for a new floating dock for Cape Town and launched a series of reforms to boost the local ship repair sector.
However, the outlook for South Africa is still mixed. As DIA imports a larger share of fuel, higher global prices and delayed deliveries hit consumers and businesses, even as the maritime sector grows.