Africa's Oil Giants Under Pressure: How Nigeria and Angola Are Navigating a Tougher Global Economic Climate

The recent decline in global oil prices is posing serious economic challenges for oil-rich African countries like Nigeria and Angola, as the region braces for slower growth and tight external financing conditions.

- By Gilbert Da Costa

The International Monetary Fund (IMF) has lowered its 2024 growth forecast for Sub-Saharan Africa to 3.8%, down from 4.2%, citing turbulent global conditions and a decline in commodity revenues. At the heart of the slowdown are falling oil prices, the knock-on effects of U.S. protectionist trade policies, and tighter capital markets that threaten to derail the continent's fragile economic recovery.

Oil Price Drop: A Blow to Nigeria and Angola

As top oil exporters in Africa, Nigeria and Angola are particularly vulnerable to volatility in global oil markets. IMF Africa Director Abebe Aemro Selassie warns that falling oil prices will significantly reduce economic activity in both countries. Nigeria, whose budget and foreign reserves remain heavily reliant on oil exports, risks increased fiscal deficits and widening trade imbalances. Angola, similarly dependent on petroleum for over 90% of its exports, faces a contraction in revenues that could derail debt repayment plans and vital social spending.