Bloomberg report warns that while a few oil exporters could benefit from rising crude prices, many African nations face inflation, currency pressure, and possible interest-rate hikes….
Rising global oil prices triggered by escalating tensions involving the United States, Israel, and Iran could strengthen the external balances of only a handful of sub-Saharan African economies, according to a new analysis by Bloomberg Economics.
The report indicates that Angola, Nigeria, and Ghana are likely to see improvements in their current account balances if crude oil prices remain elevated.
However, the outlook is less favourable for most other economies in the region, many of which depend heavily on imported fuel.
Oil Exporters to Gain
Economist Yvonne Mhango of Bloomberg Economics said that if crude prices stabilise at around $85 per barrel, the three oil-producing nations could benefit from stronger export earnings.
“If oil stays at about $85 a barrel, Angola, Nigeria and Ghana will see their current account balance improve,” Mhango said.
For these exporters, higher crude prices typically translate into increased foreign exchange inflows, stronger government revenues, and improved external balances.
Import-Dependent Economies Face Pressure
In contrast, countries such as the Democratic Republic of the Congo, South Africa, and Kenya are expected to bear the brunt of rising oil prices.
Because these economies import significant volumes of petroleum products, higher global prices can quickly translate into rising fuel costs, currency depreciation, and renewed inflationary pressures.
“For most African economies, higher oil prices mean weaker currencies and renewed inflationary pressure, which could put rate hikes back on the table,” Mhango warned.
Inflation Risks Loom
The report highlighted inflation as the most immediate economic risk for many countries across the continent.
Data from the Central Energy Fund indicates that fuel prices in South Africa are expected to rise in April, reflecting the surge in international oil prices.
Traders in the country are already pricing in the possibility of another interest-rate increase later this month as policymakers attempt to curb inflationary pressures.
Bloomberg Economics estimates that South Africa’s current account balance could deteriorate by about one percent of GDP due to higher energy import costs.
Angola and Nigeria to Benefit Most
Among African oil exporters, Angola could see one of the largest gains, with its current account balance potentially improving by as much as 3.3 percent of GDP, according to the report.
Nigeria could also benefit not only from crude exports but increasingly from refined petroleum product exports.
The analysis referenced comments by Nigerian industrialist Aliko Dangote, who recently suggested that his Dangote Refinery, with a processing capacity of 650,000 barrels per day, may increase shipments of refined products to Europe if global prices remain favourable.
Supply Pressures for Importers
For fuel-importing countries like South Africa, the situation could become more complicated if major suppliers reduce exports.
The report noted that India and Oman—two key sources of fuel supply—could tighten shipments depending on global demand and domestic supply priorities.
Oil Prices Jump
Global crude prices have already responded to the geopolitical tensions.
According to the report, Brent crude rose sharply to $85 per barrel on March 3, up from $72 per barrel recorded on February 28.
If prices remain elevated for a prolonged period, analysts warn that the ripple effects could reshape economic conditions across Africa—benefiting a small group of oil exporters while placing significant strain on many fuel-dependent economies.
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