Botswana stands out as one of the Sub-Saharan African (SSA) economies most susceptible to a sharp rise in fuel prices, a consequence of escalating US-Iran geopolitical tensions.
In a comprehensive index assessing SSA markets’ exposure to surging energy costs triggered by the US-Iran conflict, Fitch Solutions, a UK-based research firm, positioned Botswana at 11th out of 49 countries, assigning an overall vulnerability score of 62.1 out of 100.
Somalia tops the list with a score of 75.4, followed by Madagascar (69.2), Malawi (68.4), Burundi (66.7), Kenya (64.5), Eritrea (64.3), Guinea-Bissau (63.9), Mauritius (63.2), Seychelles (62.6), and Comoros (62.2). These rankings underscore the heightened risk faced by net energy importers like Botswana, where currency depreciation in several nations is anticipated to further inflate fuel import costs.
Recent data from March 9th revealed a spike in global energy prices, with Brent crude briefly surging above USD 119 per barrel before retreating to below USD 100 per barrel. Fitch Solutions attributes this volatility to near-total disruptions in maritime transit through the Strait of Hormuz, upstream production shutdowns due to constrained storage capacity, and escalating assaults on oil infrastructure across the Gulf region. In light of these developments, Fitch Solutions announced plans to raise its 2026 average Brent crude price forecast from USD 67 per barrel to a range of USD 70-75 per barrel, while also acknowledging that “escalatory risks,” as noted by their Oil & Gas team, could drive prices even higher to USD 80-90 per barrel.
Botswana’s economy, heavily dependent on mining, an energy-intensive sector, is poised to face notable economic ramifications. Markets reliant on energy-demanding industries such as manufacturing, mining, and construction are particularly vulnerable. Fitch Solutions emphasizes, “higher fuel and electricity costs will reduce productivity in energy‑intensive industries, with major mining markets such as South Africa, Zambia, the DRC, Guinea, and Botswana particularly exposed due to their reliance on diesel-powered machinery and fuel-sensitive transport services.”
Additionally, manufacturing-driven economies like Lesotho, Eswatini, and Benin may encounter similar challenges if rising input costs from higher fuel prices squeeze already narrow profit margins. SSA countries with growing agri-processing sectors, including Uganda, Kenya, Côte d’Ivoire, Ethiopia, Tanzania, and Ghana, are also confronting increased transportation and fertilizer expenses due to their heightened vulnerability to fuel price shocks linked to the US-Iran conflict.
Fitch Solutions’ analysts highlight that Botswana’s principal trading partner, South Africa, despite its more diversified economy, will not be immune to these pressures given the significance of energy-intensive sectors such as automotive manufacturing, mining, and utilities. “Across these economies, we believe rising operating costs will erode working capital and weaken capital outlays,” the analysts caution.
The ripple effects extend beyond direct operational costs. Since secondary sectors supported by mining and other primary industries tend to be labor-intensive, these pressures could stifle job creation, slow efforts toward economic diversification, and negatively impact government revenues.
Fitch Solutions’ research identifies SSA markets characterized by substantial net energy import needs, limited external financial buffers, and existing fiscal weaknesses as the most vulnerable to adverse fallout from the US-Iran conflict. Botswana, lacking domestic crude oil reserves and reliant on imported fuel products, falls squarely within this category.
In response, Minister of Minerals & Energy, Bogolo Joy Kenewendo, recently informed Parliament of ongoing efforts to mitigate the economic risks posed by global geopolitical instability and fuel supply security concerns. The Ministry is actively expanding the country’s fuel storage capacity. Currently, national strategic fuel reserves stand at 62.5 million liters, sufficient to cover only 15 days of consumption based on an annual national usage of 1.3 billion liters, according to the Minister’s recent data.
Upon completion of the Francistown depot expansion and the construction of the Ghanzi depot by 2027, storage capacity will increase, extending the supply cover to 60 days. Further enhancement is expected with the completion of the Tshele Hills fuel storage facility at Rasesa, projected for 2030, which will boost supply security to a 90-day cover.
The Tshele Hills facility will offer a storage capacity of 187 million liters, complemented by an additional 98 million liters from the expanded Francistown depot and 30 million liters from the Ghanzi depot. These strategic investments are designed to bolster Botswana’s resilience against mounting global energy market disruptions.