Oil slump, COVID-19: Nigeria, Angola, Ghana, Cameroon, Senegal hardest hit, says AEC

Nigeria to suffer $15.4bn loss, Africa’s biggest

Africa’s oil producers should unfold incentives, plan for future to survive

Ben Eguzozie, with agency report

The African Energy Chamber (AEC) based in Johannesburg, South Africa, has come out with results of its analyses of the most vulnerable African countries in the face of oil price plunge following the Coronavirus (COVID-19) pandemic. Specifically, the countries hardest hit are: Angola, Cameroon, Ghana, Nigeria and Senegal. Incidentally, the countries fall within the Gulf of Guinea region.

Global oil prices have dropped to an 18-year low of $22, thereby sending the heavily oil-reliant African countries gasping for breath amid huge revenue losses.

Angola has revised its national budget and suspended capital expenditure (CAPEX); Senegal, a West African country, expecting its first oil development, faces debt arrangement challenges; Nigeria, the continent’s largest economy, is poised for the biggest revenue loss with its 2020 budget of N10.6 trillion to be reviewed; while Ghana will get half of its projected revenue; Cameroon, a Central African country locked in internal strife in its English-speaking southern regions, is expected to see a three percent drop in its economic growth.

African oil-producing and reliant countries have been among the most hard hit by the COVID-19 pandemic and declining oil price. In particular, Senegal, Nigeria and Angola continue to face new challenges each day amid the threat of economic fallout.

AEC’s country-specific analysis indicate that Angola led by President João Lourenço, had set out to focus on economic diversification and uplift the country from nearly five years of recession. However, in the face of the oil price slump, the oil-reliant country has slowed the implementation of its planned economic reform strategy, which had included the privatization of state-owned companies; and plans to reduce public debt to less than 60 percent of GDP by 2022 from approximately 90 percent in 2018 and, over 100 percent in 2019.

In response to the current market instability, the Angolan government which relies heavily on oil revenue has declared a state of emergency, and made the decision to review its national budget. With this, it will object its budget on a reference oil price of $35 per barrel maximum – a significant cut from the initially drawn up $55 per barrel, Finance Minister Vera Davis de Sousa revealed recently, explaining that the country’s oil production is expected to tumble to 1.36 million barrels per day (bpd). Further, Davis de Sousa […]

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