Tuesday, 02 January 2024 12:17 GMT

Madagascar Declares State of Energy Emergency for 15 Days


(MENAFN) Madagascar has declared a 15-day state of energy emergency, becoming the latest African nation to buckle under the weight of a worsening fuel supply crisis driven by severe weather disruptions and the cascading consequences of the Middle East conflict on global shipping routes.

The island nation's cabinet warned Tuesday that it is "facing a deep crisis due to disruptions in energy supply across the island," with the resort island of Nosy Be — which relies heavily on Middle East supply chains — among the areas bearing the heaviest brunt. "The declaration of a state of energy emergency allows authorities to take exceptional and urgent measures to restore energy supply and ensure the continuity of public services," the government stated.

The crisis is unfolding against a continent-wide backdrop of mounting energy pressure, as the U.S.-Israel war against Iran continues to choke off shipping through the Strait of Hormuz. A joint report by the African Union, the UN Economic Commission for Africa, and the World Bank has sounded the alarm that the conflict risks transforming a trade shock into a sweeping cost-of-living crisis across Africa — driving up fuel and food prices, inflating transport costs, and battering already vulnerable currencies.

Governments across the continent are scrambling to respond. South Africa has rolled out a temporary fuel levy cut of R3 — approximately $0.16 per liter — running from April 1 to May 5 to help absorb the shock. Senegal has barred ministers from non-essential foreign travel as soaring oil prices strain state finances, while Kenya has launched close monitoring of fuel, fertilizer, trade, and port flows as a safeguard against further supply shocks.

On the financing front, pan-African lender Afreximbank announced Tuesday the approval of a $10 billion Gulf Crisis Response Programme designed to "insulate African and Caribbean economies, financial institutions and corporates from the impacts of the ongoing Gulf crisis."

Relief is also being sought closer to home. Nigeria's Dangote refinery — owned by billionaire Aliko Dangote — has moved to ramp up fuel and fertilizer exports across the continent. Dangote confirmed the 650,000-barrel-per-day facility is running at full capacity and has already dispatched 17 gasoline cargoes to African markets, as buyers scramble for alternatives to disrupted Middle East supply.

A potential turning point may be on the horizon: U.S. President Donald Trump has announced a two-week ceasefire with Iran aimed at negotiating a long-term settlement — a development that, if it holds, could restore the flow of shipping through the Strait of Hormuz and begin to ease the pressure reverberating across Africa and beyond.

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