Uche Cecil Izuora
Nigeria has been named among African oil producers to experience improved account balance amid the raging crisis that has engulfed the Middle East.
According to new report, the surge in oil prices amid the US and Israel’s war on Iran is expected to improve the current account balances of three sub-Saharan African economies, namely Nigeria, Angola and Ghana while most others will suffer, according to Bloomberg Economics.
If oil stays at about $85 a barrel, Nigeria, Angola and Ghana will see their current account balance improve, while the Democratic Republic of Congo, South Africa and Kenya will be among the worst-hit, Bloomberg Economics Yvonne Mhango wrote in a report on Thursday.
According to a report by Bloomberg Economics report on Thursday, the rise in oil prices will strengthen the current account positions of the countries.
The publication, however, said most other economies in the region will suffer.
Yvonne Mhango, said if oil “stays at about $85 a barrel, Angola, Nigeria and Ghana will see their current account balance improve, while the Democratic Republic of Congo, South Africa and Kenya will be among the worst-hit.”
“For most African economies, higher oil prices mean weaker currencies and renewed inflationary pressure, which could put rate hikes back on the table,” she said.
According to the publication, inflation will be the biggest risk for most nations.
Citing Central Energy Fund data, Bloomberg Economics said in South Africa, fuel costs are set to increase in April, while traders move to price in a chance of an interest-rate hike later this month.
According to the publication, South Africa will see its current account balance hit by 1 percent of gross domestic product (GDP).
Bloomberg Economics said Angola’s current account balance could benefit by as much as 3.3 percent of GDP, noting that Nigeria will not only gain from crude sales, but also fuel exports.
“Nigerian billionaire Aliko Dangote this week raised the prospect of sending more product from his 650,000 barrel-a-day oil refinery to Europe — if the price is right,” the publication said.