This opinion article argues that although the recent ceasefire framework in the Middle East has temporarily calmed global markets, African investors should not assume that economic risks have disappeared.

According to investment expert Cliff Bakashaba of Jubilee Asset Management Limited, geopolitical tensions continue to affect global financial systems long after active conflict reduces.

The easing of oil prices following the ceasefire has given markets short-term relief, but underlying pressures such as inflation, currency volatility, and higher borrowing costs remain significant concerns.

The article explains how conflicts in major oil-producing regions transmit economic shocks to Africa through fuel price changes, increased freight costs, and pressure on foreign exchange reserves.As oil prices rise, transport and food costs also increase, leading to higher inflation in many African economies.

This inflation often forces central banks to tighten monetary policy, limiting economic growth and increasing borrowing costs for both governments and businesses.The piece highlights that even when geopolitical tensions reduce, these effects can persist for months or even years.Using Kenya as an example, the article notes that inflation had been easing before the conflict, but external shocks disrupted this trend.

Scenario analysis suggests that inflation could rise significantly under prolonged instability, while local currencies such as the Kenyan shilling could weaken due to increased demand for US dollars.This has direct implications for household purchasing power, corporate earnings, and bond market performance.

The author further emphasises that African economies are not uniform and respond differently to global shocks depending on whether they are energy importers or exporters, and their level of foreign exchange resilience.As such, investors are encouraged to adopt a selective and disciplined approach rather than relying on broad market assumptions.

Ultimately, the article concludes that while the ceasefire is a positive development, investors, insurers, and asset managers should prioritise long-term resilience, inflation protection, and currency risk management rather than short-term market optimism.