World Bank warns Middle East crisis puts Ksh14.7T Africa investments at risk
By Aloys Michael, April 11, 2026Investment flows from Gulf countries into Sub-Saharan Africa, estimated at Ksh14.7 trillion, could slow significantly, according to the World Bank.
According to the report dubbed Africa Economic Update Making Industrial Policy Work in Africa, released on Friday, April 10, 2026, the lender links the potential slowdown to the ongoing Middle East crisis, which has pushed sovereign wealth funds to rethink their exposure and shift investment priorities.
It reckons that the shift could delay or scale back major projects.
“Heightened uncertainty is prompting sovereign wealth funds to reassess exposure and investment priorities, potentially delaying or scaling back large-scale projects in energy, including hydrogen, solar, and wind, as well as in infrastructure, logistics, mining, and agriculture,” the lender said.
It adds that some strategic renewable energy projects may remain insulated due to long-term diversification goals in the Gulf.
The uncertainty is already influencing funding decisions, with early-stage and pipeline projects considered most vulnerable to delays or reprioritisation.
The Gulf countries, led by the United Arab Emirates, Saudi Arabia and Qatar, committed 156 greenfield FDI projects in Africa in 2022 and 2023 alone, collectively valued at Ksh14.59 trillion.
These funds have largely flowed into renewable energy projects, including hydrogen, solar and wind, as well as ports, warehouses, data centres, mining and agriculture.
The United Arab Emirates accounted for about Ksh7.67 trillion of the total, with heavy exposure in critical minerals such as copper, nickel and cobalt, alongside logistics investments aimed at strengthening food and energy security.
Other Gulf-backed initiatives have also expanded into African agriculture, including land acquisitions, food production and processing facilities targeting both local and export markets.
Beyond investment flows, the report flags rising risks to remittances from Gulf-based migrant workers, a key source of income for African households.
The lender estimates that countries such as Kenya could lose up to Ksh5.17 billion monthly as weaker labour demand, slower hiring and possible repatriations weigh on earnings in the construction and service sectors.
Kenya inflation crisis
The reports come just a day after the lender cautioned that escalating geopolitical tensions, especially the ongoing conflict involving Iran, could drive up inflation and slow economic growth across African economies.
Countries that rely heavily on imported oil, such as Kenya, are expected to feel the greatest impact as fuel prices surge and food costs rise due to supply disruptions linked to instability in the Middle East.
The monetary lender cut its 2026 growth forecast for the region by 0.3 per cent to 4.1 per cent, matching last year’s pace, while predicting inflation to rise to 4.8 per cent from the previously expected 3.8 per cent.
“The burden will fall most heavily on the world’s most vulnerable populations, particularly in low‑income, import‑dependent economies. Spikes in fuel prices and potential sharp increases in food prices are especially concerning where fiscal space is constrained, and debt burdens are already high, reducing governments’ ability to protect vulnerable households,” the WB said in a statement on Wednesday, April 8, 2026.
According to the monetary institution, these ongoing global price shocks could deepen poverty in regions already facing high vulnerability.
In Kenya, where the economy relies heavily on imported fuel and food, inflation is projected to increase by over 4 per cent, potentially cutting household incomes by 2.6 per cent and pushing nearly one million people below the poverty line.
Additionally, investment inflows from Gulf countries, key contributors to Kenya’s infrastructure and development, may slow as these nations shift focus to post-conflict reconstruction, placing further pressure on economic growth.
Remittances from African workers in the Gulf constitute a significant part of national economies. In Ethiopia, for example, around 750,000 citizens work in Saudi Arabia, sending home funds that amount to roughly 5 per cent of the country’s gross domestic product.
A similar dynamic could impact Kenya indirectly if regional remittances are affected.