The surge in oil prices following the US and Israel’s war on Iran will improve the current account balance of just three sub-Saharan African economies, while most others will suffer, according to Bloomberg Economics.
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, Bloomberg Economics Yvonne Mhango wrote in a report on Thursday.
“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.
Inflation will be the biggest risk for most nations.
In South Africa, fuel costs are poised to increase in April, according to Central Energy Fund data, while traders moved to price in a chance of an interest-rate hike later this month.
The biggest economy on the continent will see its current account balance hit by 1% of gross domestic product, according to BE.
Angola’s current account balance could benefit by as much as 3.3% of GDP, BE said. 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.
For South Africa, fuel supplies could also become a challenge if India and Oman, two of its biggest suppliers, throttle exports.
