Located in the Middle East, Israel and Iran are strategically located and have implications on the International Political Economy. According to Strange’s (1988) look at structural power, the Middle Eastern conflict reconfigures control over trade, finance, and security to a great extent. Furthermore, looking at dependency and asymmetric interdependency, Keohane and Nye (1977) posits African reliance on external actors for energy, aid, and investment as a vulnerability factor. This has further implications for Western or Gulf powers in shaping African responses as studied by Cox (1983) from a Neo-Gramscian Hegemony perspective.

At the core of the international political economy is international economic interaction, which is embedded into political and military institutions and structures. The world market, respectively the global economy, is marked by huge differences, asymmetries and dependencies. According to Peterson (2021), “through a political economy lens, we examine how states and markets – or politics and economics – are never categorically separate but are rather continuously interactive and mutually determining”. From this International Political Economy analytical lens, it is evident that Africa’s structural position in the global economy amplifies its vulnerability to external shocks, yet regional agency offers pathways for mitigation as posited by Strange (1988) in her writings on States and Markets. From this perspective, the Israel-Iran crisis also has implications for the energy markets and asymmetric interdependence.

Oil prices are largely volatile and the Middle East is the largest producer of oil and any renewed conflict in the region spikes oil prices, devastating import-dependent African nations characterised by inflation, currency devaluation, subsidy burdens, and halted recovery. Oil price volatility exposes Africa’s import-dependent economies, reinforcing dependency. According to Keohane and Nye (1977) on Power and Interdependence analysed how asymmetry in oil trade deepens African vulnerability. Furthermore, from Basedau and Lacher (2006) analysis on the paradox of plenty, oil-importing African states face destabilising fiscal pressures and this will be exacerbated by the Israel-Iran crisis if it escalates to an all-out warfare.

From an International Political Economy perspective, trade and logistics are characterised by choke points and global production networks. Trade route play an important part in global trade in oil and the Red Sea and Suez Canal are of paramount importance. A Red Sea/Suez Canal crisis amplifies the Houthi impact increasing shipping costs and delays for African imports and exports in both oil and food and other goods. Red Sea militarisation is plausible with increased naval presence and skirmishes threatening vital trade artery for East Africa. Red Sea/Suez Canal disruptions fragment Africa’s integration into global trade. Recent studies show that there is a 30% cost increase in Suez transit delays for East African agricultural exports, for example, Kenyan flowers a, or Ethiopian coffee – thus in case of escalation of the Israel-Iran Crisis rerouted shipping will lead to marginalisation of African ports. Thus, as according to Gereffi (2014), Africa’s “periphery” role in Global Value Chains heightens disruption risks. As the Red Sea/Suez canal is a strategic corridor and is an International Political Economy battleground (Levison, 2006).

Furthermore, the Israel-Iran Crisis is likely to affect International Aid and Investment Diversion characterised by diverted capital and secondary sanction. Analysing the Israel-Iran Crisis from Wade’s (2011) reallocation of Official Development Assistance (ODA) in multipolar crises perspective, conflict realigns global capital flows further squeezing African development finance as Western aid and funding is likely to be redirected to the Middle Eastern security. Thus, there will be potential reallocation of global aid and finance towards the Middle East crisis, away from African development needs. Furthermore, from Fassihi’s (2023) analytical lens, there is a possibility secondary sanctions on African entities, like Sudan and Senegal, trading with Iran. If the Israel-Iran war escalates further, African economies still recovering from the COVID-19 crisis and Ukraine war impacts would be brutalised.

Furthermore, Africa has become an unintended but highly vulnerable casualty of distant geopolitical fires with the risk of regional spill-overs in the Horn of Africa. Competition for regional hegemony turns Africa into a contested periphery as extra-regional powers exploit African governance gaps (Bach, 2017). Iran can also use its cultural and religious outreach as International Political Economy tool (Solomon, 2022) furthering Iranian arms flows to Somalia or Sudan versus Israeli security partnerships like Rwanda and the Sahel. Iranian proxies and allies have potential for heightened activity and arms flows to groups in Somalia (Al-Shabaab), Sudan (RSF), and Yemen (Houthis) near key shipping lanes. This will further have effects in Gulf Ally pressure with demands on key US/EU allies like Egypt, Djibouti, Kenya, Somalia to take sides or offer basing or logistics, straining their neutrality or domestic politics. The horn of Africa’s strategic location makes it a potential frontline for indirect confrontation, destabilising an already volatile region.

According to Jager (2020), international developments have to be understood against the background of specific national and regional economic and political relations and processes. From Marx’s Critical International Political Economy perspective, we can understand what drives global history and why there are always struggles and disputes, not only at the local or national levels, but also internationally. Thus, with high structural vulnerabilities, Africa’s agency in the International Political Economy is greatly compromised.

Evidence has it that there are limits of agency for Africa under neo-colonial economic structures as critiqued by Langan (2018). On the backdrop of existing conflicts, Israel/Iran-aligned actors could exacerbate instability in Sudan, Somalia, and Ethiopia for strategic advantage. This will cause Africa to walk on a tightrope characterised by diplomatic dilemma in the Israel-Iran standoff. Thus, this will call for diplomatic balancing act and non-alignment on the backdrop of a divided continent. Hence, there will be likely varying African stances (Pro-Palestine, Pro-Israel, Non-Aligned) and historical ties to both sides (Iranian outreach vs. Israel tech/security cooperation). Nonetheless, although Africa is largely economically vulnerable and energy insecure and the Israel-Iran conflict threatening stability in the Middle East and Africa’s fragile economic recovery, there is an opportunity for Africa to navigate non-alignment as the African Union (AU), Southern Africa Development Community (SADC), and other regional bodies can leverage neutrality for diplomatic advantage. According to Acharya (2014), due to the weakening of the American World Order, multipolarity creates space for African bargaining with strategies that include diversifying partnerships, for example Egypt’s Suez diplomacy or South Africa’s BRICS engagement. Furthermore, Africa can also adopt the Djibouti model through demanding “crisis premiums” for basing rights.

In conclusion, whether the African Union maintain a unified position, or national interests fracture its response – is an AU Cohesion Test. Towards a resilient African International Political Economy, it is imperative for Africa to structurally decouple (Nkrumah, 1965), and accelerate regional energy and food sovereignty through the African Continental Free Trade Area (AfCFTA) (AU Commission, 2021) and local refining as industrialisation opportunity (Signe, 2019). AfCFTA is Africa’s most ambitious economic integration project since independence and, if fully implemented, it could lift 30 million Africans from extreme poverty (World Bank, 2020) and reposition the continent as a self-sustaining economic force. However, success hinges on overcoming infrastructural deficits, political fragmentation, and external pressures like geopolitical conflicts in the Middle East.

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