The Bottom Line
The world holds its breath when the Strait closes
By Adrian Ephraim
THE crisis in the Middle East is a slow-burning threat to the payment chains that keep African trade going.
The world’s most important waterway basically closed down on the morning of February 28, 2026. When the US and Israel attacked Iran, the Middle Eastern country blocked the Strait of Hormuz and laid sea mines across a corridor that had been quietly carrying about 20% of the world’s oil trade by sea every day. Before the war started, about 3,000 ships went through Hormuz every month. By April, the recorded crossings numbered only 191, representing roughly 5% of the pre-war average.
The tremors have since spread far beyond the Gulf. The price of oil has gone up, inflation is rising again, and it costs a lot more to move almost anything anywhere. For South Africa’s exporters, who sell goods to markets that are already struggling with debt, weak currencies, and high taxes, the question is no longer if this crisis affects them – it’s when and how.
Warren Koen, Manager in the Office of the CEO at the Export Credit Insurance Corporation of South Africa (ECIC), has been thinking about that question. He says that the answer isn’t available right away, but it is coming.
Koen says, “This kind of thing could cause defaults and missed payments. We make sure that there is export credit, like bank loans and other things. In the future, this kind of thing could cause exporters to miss payments, which could then cause the banks to make a claim on the loan.”
The ECIC is a state-owned company that provides political and commercial risk insurance to South African exporters. It does not cover ships or shipping routes. It backs up the money relationships that make export deals possible, like the chance that a buyer in Angola, Mozambique, or Ghana won’t pay. The Hormuz crisis changes the economic environment for those buyers, and that eventually shows up in ECIC’s risk models.
Koen is careful to keep the current crisis separate from ECIC’s current pipeline growth. He says, “We’ve seen an increase as ECIC, but it’s not necessarily related to this issue yet.” The institution’s current deal pipeline is about $4 billion under review. It hasn’t been underwritten yet, but it’s a promising sign of where demand is going. ECIC’s own board overview for March 2026 says that there will probably be “more uneven risk profile across markets” as exporters and lenders look for opportunities in sub-Saharan Africa. This will likely lead to “more demand for credit and political risk cover”.
The Middle East crisis is making that unevenness worse. The UN Trade and Development (UNCTAD) said in April 2026 that the disruption is a big supply shock that will raise prices and lower demand. Global growth is expected to slow from 2.9% in 2025 to 2.6% in 2026. Sub-Saharan Africa is already more vulnerable to shocks in fuel, fertiliser, and shipping than in most other areas. This year, it is growing at a rate of 4% to 4.6%. At 1.4%, South Africa is last in line. Koen says that ECIC takes a long-term approach to methodology rather than changing prices for each crisis. One way that global volatility affects underwriting decisions is through country risk ratings, which are updated regularly and posted on the ECIC website. He says, “The global economy affects where we work, which affects our political and economic research and how often we have to do stress scenarios to see what the problems might be.” The rest is done by the project-level assessment, which looks at sponsors, bankability, and the sovereign balance sheet.
Koen says that oil, gas, and infrastructure are the sectors that that feature prominently in the ECIC pipeline. A big focus is on four Mozambique LNG projects that will be operational soon, as well as border infrastructure in Zimbabwe and Zambia.
Koen says that ECIC’s short-term insurance strategy, which was launched in 2023 and is aimed at transactions that last less than two years, is the easiest way for South African exporters who haven’t yet got coverage to get it. Koen highlighted the US$100 million Trade Finance Framework Facility with ABSA which provides additional support specifically for SMMEs, BEE businesses, Black industrialists, and businesses owned by women and young people.
The Strait of Hormuz is a major trade route for fertiliser raw materials, and problems with ammonia and nitrogen shipments are starting to limit supply at a crucial time. This affects the costs of agricultural inputs in the African markets where ECIC’s clients are exporting. The Hormuz disruption is said to be the biggest oil supply shock in the history of global markets, even bigger than the oil crises of the 1970s. It is still unclear if it will be over in a few weeks or last until late 2026. What is not in doubt is that its effects on sovereign balance sheets, buyer liquidity, and the cost of doing business across Africa will keep coming long after the strait reopens.
ECIC, on the other hand, says its basics are solid, it has strong solvency cover, and it hasn’t gone over any risk-appetite limits. Koen says, “This is exactly the kind of organisation you want on your side when the world’s bottlenecks start to close.”
