Aliko Dangote has cautioned that escalating oil price volatility tied to tensions around the Strait of Hormuz could destabilise critical sectors across Africa, particularly aviation and agriculture.
Speaking at the Semafor World Economy Summit, Dangote said African airlines are already under severe strain from sharp fuel price fluctuations, noting intraday swings of up to $10 per barrel.
“The majority of African airlines won’t be able to survive,” he said, describing the market movements as unprecedented, according to Business Insider Africa.
The warning comes as Nigerian carriers weigh suspending operations due to rising aviation fuel costs, highlighting the sector’s dependence on imported fuel and exposure to currency pressures.
Dangote also flagged mounting risks in agriculture, pointing to a surge in fertiliser prices from about $400 to $850 per tonne in recent months.
He warned that the spike could disrupt the upcoming planting season without government support. “This farming season the governments have to actually give subsidies,” he said.
He added that a diplomatic resolution between the United States and Iran could help stabilize oil markets, but cautioned that any recovery would take months due to ongoing supply chain disruptions.
Don’t Miss This:
Dangote Refinery Drives Nigeria To Historic Fuel Export Status As Output Surpasses Local Demand
Separately, Letsetja Kganyago, governor of the South African Reserve Bank, signalled a more aggressive stance on inflation risks.
Breaking from the cautious approach of institutions such as the Federal Reserve, European Central Bank, and Bank of England, Kganyago said policymakers must act early.
“It is important to anticipate any evidence” of second-round inflation effects, he said, warning that delays could allow price shocks to spread through wages and economic activity.
He described the current environment as a “sequence of shocks,” with fuel prices driving transport costs and fertiliser prices affecting agricultural output. Beyond pricing, he stressed that access to these inputs remains a major concern.
The central bank has kept interest rates steady in recent months, maintaining a hawkish stance and pushing back expectations of rate cuts. It also outlined scenarios where prolonged conflict could keep oil prices at or above $100 per barrel, weaken the rand, and force rate increases later in the year.
What this means for Africa
This situation puts African economies in a tight spot. Higher fuel and fertilizer costs hit two essentials at once, transport and food production. That combination can quickly push up prices across the board, especially in countries already dealing with fragile supply chains.
For businesses, particularly airlines and farmers, survival becomes harder as costs rise faster than revenue. For governments, the pressure builds to step in with subsidies or policy support, even as inflation limits how much they can do.
Simply put, Africa is being squeezed from both ends, energy and food, and how policymakers respond will shape how deep the impact goes.
Don’t Miss This:
Dangote Eyes Multi-Exchange Listing For $20 Billion Refinery Across Africa
Image Credit: Business Insider Africa
