The Ghana cedi and Uganda shilling are expected to come under fresh pressure in the coming days as traders brace for continued fallout from the conflict in the Middle East, which is driving up oil prices and increasing demand for dollars across several African markets.
Market participants say the rise in geopolitical uncertainty is beginning to ripple through foreign exchange markets, particularly in energy-importing economies where higher crude prices are quickly translating into stronger demand for hard currency to finance imports.
In Ghana, the cedi is expected to weaken further against the dollar as foreign exchange demand from the energy, manufacturing and commerce sectors continues to outpace supply. Data from the London Stock Exchange Group (LSEG) showed the cedi trading at 10.99 to the dollar on Thursday, compared with 10.95 a week earlier.
Traders say local corporate demand remains elevated, especially from firms seeking dollars to settle import obligations. At the Bank of Ghana’s foreign exchange auction on Tuesday, total bids reportedly reached US$357 million, far above the US$110 million made available, highlighting the depth of pressure in the market.
The central bank sold US$1 billion in foreign exchange intermediation flows in March and is expected to offer a similar amount in April in a bid to steady the market. Analysts say those interventions, along with inflows from the mining sector, could help slow the pace of depreciation, though not necessarily reverse it if external pressures intensify.
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In Uganda, the shilling is also expected to trade with a weaker tone, largely due to stronger demand from fuel importers responding to higher global crude prices. By midday Thursday, commercial banks in Kampala were quoting the currency at around 3,747/3,757 to the dollar, compared with 3,712/3,722 a week earlier.
Traders in Uganda say the market has seen increased appetite for dollars from energy-related importers, a trend directly linked to the spike in oil prices following the escalation in the Gulf. The shilling is now expected to trade in the 3,740 to 3,780 range in the near term unless supply conditions improve.
Elsewhere in East Africa, the Kenyan shilling is expected to remain broadly stable, although traders warn that demand for dollars across multiple sectors could gradually weaken the currency if inflows soften. One area of concern is the possible slowdown in diaspora remittances from the Middle East if the regional crisis persists.
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By contrast, Nigeria’s naira is seen as relatively more insulated for now, supported by stronger oil receipts as crude prices climb. Traders expect the naira to remain broadly range-bound in the week ahead, though they caution that any further escalation in the Middle East could strengthen the dollar globally and offset the benefit of higher oil prices for Africa’s largest crude exporter.
In Zambia, the kwacha is expected to hold relatively firm, helped by hard currency inflows linked to tax payments and local bond market activity.
The broader picture, however, points to rising caution across African currency markets. As the Middle East conflict continues to disrupt oil flows and rattle investor sentiment, central banks and traders across the continent are increasingly preparing for renewed volatility, especially in countries with high import dependence and fragile FX buffers.
For Ghana and Uganda, that means the immediate pressure is likely to remain on the downside.
The concern around the cedi and Kenyan shilling is rooted in a familiar pattern for African foreign exchange markets: when Middle East tensions intensify, investors typically rush into the U.S. dollar, while oil prices rise sharply. That combination tends to hurt oil-importing African economies because they suddenly need more dollars to pay for fuel imports, putting pressure on local currencies. Reuters and other market trackers say the latest escalation has revived exactly that fear across African FX desks.
For Ghana, the issue is especially sensitive because higher oil prices can quickly feed into the broader economy through fuel costs, transport fares, inflation and import bills. Even though the cedi has enjoyed a period of relative stability and support from improved macro conditions, the country remains vulnerable to an external oil shock because Ghana still imports refined petroleum products and depends heavily on foreign exchange availability. The Bank of Ghana has recently pointed to stronger disinflation and improved macro stability, while official interbank data showed the cedi trading around 10.8 to the dollar in March 2026 — but analysts say geopolitical shocks can quickly interrupt that stability.
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For Kenya, the logic is similar, though the pressure point is often even more directly tied to import demand and dollar liquidity. Kenya is also a major net oil importer, so any sustained spike in crude prices tends to widen pressure on its external balances and fuel importer demand for dollars. The Central Bank of Kenya’s published exchange-rate data and monetary policy materials show the shilling had entered 2026 from a relatively more stable footing than in previous years, but traders still see it as exposed when global risk sentiment turns defensive and energy prices jump.
The wider backdrop is that this is not just a currency market story — it is also an inflation and monetary policy story. African central banks, including in countries such as Ghana, had only recently started benefiting from easing inflation and calmer exchange-rate conditions. But a prolonged oil shock from the Middle East could force policymakers to delay or rethink monetary easing, because weaker currencies would make imports more expensive and risk reigniting inflation. Reuters reported in March that African policymakers were already warning that the Iran-related oil shock could complicate monetary policy across the continent.
Another strong angle is that not all African currencies are hit equally. Oil exporters may get some temporary support from higher crude prices, but oil importers such as Ghana and Kenya tend to feel the pain first. That is why market watchers are linking the cedi and shilling to the current Middle East flare-up more than some commodity-linked African currencies. Research notes and market commentary this week suggest that if the conflict drags on — especially if it disrupts shipping routes such as the Strait of Hormuz — pressure on fuel-importing African currencies could intensify further.
