Report: Rising oil prices will improve current account balances of Nigeria, Ghana

A surge in global oil prices triggered by the escalating conflict involving the United States, Israel and Iran could bring economic relief to a handful of African oil producers, including Nigeria. According to a recent report by Bloomberg Economics, higher crude prices are expected to strengthen the current account balances of Nigeria, Angola and Ghana, even as most other sub-Saharan African economies face growing financial pressure.

The report highlights that if oil prices remain around $85 per barrel, the three oil-producing nations could see improvements in their external financial positions. Economist Yvonne Mhango noted that countries such as the Democratic Republic of the Congo, South Africa and Kenya may instead bear the brunt of higher energy costs due to their heavy dependence on fuel imports.

For many African economies, rising oil prices could also trigger a fresh wave of economic challenges. Higher fuel costs often weaken local currencies and push up inflation, potentially forcing central banks to reconsider interest rate hikes. Analysts warn that inflation could become the biggest economic risk across the region if global energy prices remain elevated.

In South Africa, fuel prices are expected to rise in April, according to data from the Central Energy Fund. The report estimates that the country’s current account balance could decline by about 1 percent of its gross domestic product (GDP) as a result of the price shock.

Meanwhile, Nigeria could benefit not only from crude oil exports but also from refined fuel shipments. Billionaire industrialist Aliko Dangote recently suggested that his massive refinery could increase product exports to Europe if market conditions remain favorable. The 650,000-barrel-per-day Dangote Refinery is expected to play a significant role in boosting Nigeria’s energy export potential and strengthening its economic outlook amid rising global oil prices.

source: The Cable