African economies face heavy toll of the Israel-Hamas conflict in Gaza

African countries are facing another round of higher costs from a war they didn’t start, after Palestine militant group Hamas touched off a new conflict with Israel this week.

And a week after the unprecedented attack on Israel, which responded with a continual raid on Gaza Strip throughout the week, experts say African countries may not suffer deaths yet, but the burden could come in the form of heightened security risks, bigger costs of importation and a geopolitical pressure on their stands.

On Thursday, agents of Al Shabaab, the Somali militant group, peddled a document to journalists in which they praised Hamas for raiding Israel, their common enemy for years.

Security analysts say that the Al Shabaab and Hamas have had no direct relations yet but could still target East African installations for opportunistic attacks and raise their own profile.

Read: Kenya warns risk of attacks over Israel-Hamas war

“Brace for terrorist learning and copy-cat,” Dr Rashid Abdi, Horn of Africa security researcher, warned on his X page.

Hamas is a divisive militant group. Calling themselves freedom fighters in Gaza Strip, they are labelled a terrorist group in most of Western countries.

Yet their decision to launch attacks on Israel, they argued, was to revenge for Israel’s continual violation of Palestinian rights. Observers say that the terror tag has not stopped enthusiasts of Palestine freedom from seeing Hamas’ acts as heroic, and hence anyone seen publicly supporting Israel could be targeted anywhere in the world. For East Africa, terror cells could be awakened to show solidarity.

“We are living in polarised times and grievances related to the Palestinian issue have been a driver for some to join militant groups,” said Dr Hawa Noor, an independent researcher.

“The best thing for Kenya would be to keep a low profile; being the proponent of peace, without aligning with any side,” she told The EastAfrican.

In the past, Kenya has faced the wrath of Palestine militants, for offering support to Israel. An Israeli-owned hotel was attacked. In 2002, Al Qaeda agents launched rockets on an Israeli airliner near Mombasa. They missed, but the airline stopped flights to Kenya to date, citing security.

Read: Kenya asks for Israel’s help in war on terror

Disproportionate response

When Hamas first attacked Israel on October 7, Kenya said it “stands in solidarity with Israel.” But the Ministry of Foreign and Diaspora Affairs later clarified Nairobi also calls for de-escalation.

“Kenya’s reaction, as indicated in the statement by the President, focused on a particular incident, that is the new terrorist attacks. Terrorism anywhere is completely unacceptable,” said Foreign Affairs Principal Secretary Korir Sing’oei.

“We are also concerned with the retaliatory attacks on the part of Israel. It looks like it is excessive and not proportional. The best thing is a return to the path of peace.”

Others like Sudan, Djibouti and South Africa blamed Israel for igniting anger among Palestinians, saying the continual violations had radicalised the group.

Sudan in particular had been the latest African country to acknowledge Israel’s sovereignty in 2021. But it said it defends Palestine’s right to self defence.

Jihad Mashamoun, a Sudanese researcher and political analyst on Sudanese and Horn of Africa Affairs told The EastAfrican, however, that the public sentiments in Khartoum may not hurt its diplomatic ties with Israel, yet.

“I highly doubt it will ruin diplomatic relations. The relationship is based on Sudan closing both Hamas and Hezbollah offices and operations in Sudan,” said Mr Mashamoun, an honorary research fellow at Institute of Arab and Islamic Studies of University of Exeter, UK.

“(Sudanese military leader Abdel Fattah) Burhan focused on that aspect including (his opponent Mohamed Hamdani) Hemedti in the past so that Israel could lobby on his behalf in Washington. The intention: Burhan wants Washington to support the stability in Sahel and Horn and to Middle East too.”

The conflict, however, could divert attention on Sudan, worsening the crisis.

Murithi Mutiga, Africa director at the International Crisis Group, said that could be a potential economic whip on countries that are mainly net importers.

Read: Fight against extremism, graft takes toll on region

“A lacklustre diplomatic response to the war in Sudan, which has spawned the worst internal displacement crisis in the world, illustrates the degree to which global actors have been distracted by events elsewhere,” Mr Mutiga told The EastAfrican.

“Developments in Gaza and Israel will worsen this trend particularly considering that parties such as Saudi Arabia and the US, which have been trying to steer diplomatic efforts on Sudan are indirectly implicated in the latest hostilities as are Egypt and the UAE.”

Worse still, Africa, he argued, can ill afford another global shock to add to Covid-19, climatic stresses and Russia’s invasion of Ukraine, all of which have seen imports costs rise amid food shortages.

“Rising energy costs in particular will be a hammer blow to economies already struggling to recover from multiple setbacks in recent years,” he argued.

East Africa, which has been tipped by the African Development Bank to be the fastest growing region on the continent, with a growth rate of 5.1 percent this year may closely follow the developments in the Gaza conflict owing to its bilateral relations with both the Western and Arab countries.

A cross-section of economists sampled by The EastAfrican expressed fears over the possible impact of the conflict on the East African nations.

Dr Samuel Nyandemo, a senior lecturer at the University of Nairobi’s School of Economics, said one possible effect is the US reducing its dollar flows to the Arab world, indirectly affecting countries in the Horn of Africa, which rely on these countries for economic support.

Besides an imminent increase in production costs, from higher prices, African countries are likely to feel friction from their geopolitical alliances around supporting Israel, he argued.

African leaders are united in condemning violence in the current Israel-Palestine conflict, but remain deeply divided on who to blame.

In the aftermath of unprecedented attack on Israel by the Hamas militant group, a number of African leaders issued statements reacting to the violence. But even they couldn’t agree on whether to call it terrorism or war, in a first sign of disagreement.

Kenya’s statement tallied with Rwanda condemned “this act of terror, particularly targeting innocent civilians” although it called for de-escalation.

Read: How the Israeli-Hamas war is dividing Africa

DR Congo’s President Felix Tshisekedi also “firmly condemned the terrorist attacks that struck the state of Israel on Saturday, causing heavy loss of life and many injuries.” He received flak from local activists.

However, theirs was at variance with other countries in the region, as well as the African Union, which labelled the new conflict as “hostilities” and lay blame on Israel for planting its seed.

“The Chairperson (Moussa Faki Mahamat) wishes to recall that denial of the fundamental rights of the Palestinian people, particularly that of an independent and sovereign State, is the main cause of the permanent Israeli-Palestinian tension,” said a statement from the AU Commission.

“The Chairperson urgently appeals to both parties to put an end to military hostilities and to return, without conditions, to the negotiating table to implement the principle of two States living side by side, to safeguard the interests of the Palestinian people and the Israeli people.” Tanzania condemned the “violence” and called for a peaceful resolution of the conflict.

The African Union has struggled to balance the equation on the Israeli- Palestine conflict as Israel expands influence on the continent. So far, Israel is recognised by 46 of the 55 AU member states and has 17 embassies and 12 consulates in Africa. But the AU has been unable to confirm Israel’s observer status since it applied to rejoin in 2021.

This year, leaders failed to reach consensus, punctuated by the embarrassing ejection of Israeli diplomat Sharon Bar-li from the AU sittings.

In 2021, Mr Faki had accepted credentials of Israel’s ambassador to the African Union, Aleligne Admasu, signalling formal admittance. But when the leaders refused, Faki hit the roof, accusing member states of hypocrisy.

“What is this logic that allows a Member State to enjoy the recognition of a State at home and to refuse it to the Organisation, whose overwhelming majority recognises this State?” Faki said in February last year at a session of the Assembly of Heads of State and Government in Addis Ababa.

“Is the said State [acceptable] at the national level while it cannot be [accepted] at the African level? Frankly, I would like someone to explain this kind of double standard to me.”

According to Ken Gichinga, chief economist at Mentoria Consulting, a fresh wave of inflation and high interest rates in the region, regardless of what stand they take. This is because the conflict triggers price hikes on energy products.

Early this month, the Bank of Uganda and the Central Bank of Kenya held their policy rates stable at 9.5 percent and 10.5 percent, respectively, to anchor inflation expectations amid surging fuel prices.

Read: EA braces for pain at the pump as Riyadh cuts output

The larger effects, though, argued Tony Mwiti, director at Clark and Hampton, an alternative economic firm, could be its potential to touch off tensions between Muslims and other faiths like Jews and Christians, given the war scene is central to all the Abrahamic religions.

Nonetheless, the actual economic or political impact will depend on each country’s ability to steer, according to Reginald Kadzutu, CEO at the asset management firm Amana Capital Ltd.

“Globally, if people perceive the conflict to be a contributor to economic uncertainty then the dollar might strengthen and then the region will be impacted through import prices,” says Mr Kadzutu.

Civilians are fleeing northern Gaza by car, on the back of trucks and on foot after an Israeli warning that civilians should move south. About 1.1 million people living in northern areas have been told to leave in the next day. The UN urged Israel to withdraw its order, warning of “devastating humanitarian consequences”.

Hamas kidnapped at least 150 people and took them into Gaza during attacks on Israel at the weekend killing 1,300 people. More than 1,500 people have been killed in Gaza since Israel launched retaliatory air strikes, which continue. A total blockade is being enforced with fuel, food and water running out. Israel says it won’t lift the restrictions unless Hamas frees all hostages.

Israel broke a more than 40-year policy of not flying on the Jewish Shabbat to bring Israeli reservists’ home from around the world to serve in the army.