How Sanctions Work — And How They Affect African Countries Caught in the Middle

Economic sanctions are regulatory, financial, and commercial restrictions imposed by states or international organisations to force a target entity—usually a sovereign government, political faction, or individual—to alter its policy or behavior. Rather than deploying armed force, sanctioning authorities leverage economic coercion. Measures range from targeted 'smart sanctions' (such as individual travel bans and asset freezes) to comprehensive embargoes that isolate entire economic sectors, including energy, mining, and banking.

The global efficacy of Western sanctions relies heavily on the dominance of the United States dollar and the Western-led financial architecture. When the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) or the European Union issues sanctions, they do not merely restrict domestic companies from trading with target entities. They utilize 'secondary sanctions' to penalize foreign financial institutions operating in third countries if those institutions facilitate transactions with sanctioned targets. Because global trade is predominantly settled in US dollars using the SWIFT banking system, non-US banks risk losing access to dollar clearing privileges if they violate these directives.

This dynamic creates severe compliance friction across African economies, a phenomenon known as bank 'de-risking'. To avoid multi-million-dollar fines from Western regulators, multinational and domestic banks operating in Africa frequently implement hyper-conservative compliance protocols. Consequently, African import-export businesses, agricultural firms, and state enterprises experience delayed international transfers, heightened documentation requirements, and outright rejections of legitimate commercial transactions, even when the underlying goods—such as food or medical supplies—are legally exempt from sanctions.

Supply chain spillovers represent another direct vector of impact. When major global suppliers of raw materials, fertilisers, or energy are subjected to sanctions, global commodity markets experience immediate supply shocks and price inflation. Following broad sanctions on Eastern European producers, global grain markets experienced acute price volatility, with benchmark global wheat pricing hovering around *** (live) per bushel and international oil benchmarks like crude reaching ** (live)* per barrel. African nations, which rely heavily on imported fuel, grain, and chemical fertilisers, absorb these cost increases directly into their domestic supply chains.

For African governments, navigating these sanctions presents a diplomatic and macroeconomic tightrope. Maintaining official neutrality in geopolitical disputes does not shield a country from physical supply disruptions or currency pressures. When local importers must pay elevated prices for essential commodities using scarce foreign exchange reserves, domestic currencies depreciate rapidly. This currency pressure compounds local food and core inflation, driving indicators like Nigeria's headline consumer price index to *** (live)* and straining household purchasing power across urban and rural communities alike.

Beyond international sanctions imposed by external superpowers, regional economic communities within the African continent also deploy sanctions as political tools. The Economic Community of West African States (ECOWAS) and the African Union (AU) have historically invoked economic blockades, border closures, and financial suspensions against member states following unconstitutional changes of government, such as military coups in Mali, Burkina Faso, and Niger. These regional blockades halt cross-border transit, isolate landlocked economies, cut off cross-border electricity grids, and interrupt intra-regional trade in basic foodstuffs.

From a policy perspective, regional trade frameworks like the African Continental Free Trade Area (AfCFTA) face significant structural friction from both global and regional sanctions regimes. Currently, intra-African trade accounts for approximately ~15% (live) of total African commerce, reflecting long-standing infrastructural bottlenecks and trade barriers. While AfCFTA promises to build an integrated single market that buffers member states against external global trade shocks, sanction-induced border closures, trade bans, and disjointed cross-border payment rails directly undermine this promise. To overcome these distortions, regional policy efforts are expanding resilient, independent financial infrastructure, such as the Pan-African Payment and Settlement System (PAPSS), designed to settle cross-border trade in local currencies without routing funds through intermediary Western clearing banks.

Ultimately, African nations caught in the crossfire of international sanctions face structural vulnerabilities that extend far beyond their direct control. The compounding impacts of elevated input costs, restricted correspondent banking networks, severe foreign exchange drains, and fragmented regional logistics highlight the structural limits of global trade neutrality in a multipolar world. As global powers increasingly weaponise economic channels, developing economies are compelled to diversify their trade partners, strengthen regional industrial bases, and build resilient payment systems to cushion their populations from external geopolitical shocks.