CAPE TOWN: South African slump in global oil prices is facing fresh challenges in 2015 far more than the Ebola epidemic and will likely have more far reaching implications for countries facing elections.
With the price of Brent crude at five an a half year lows, Africa’s top oil producers, Nigeria, Angola, Libya and Algeria face growing fiscal challenges because more than 70% of these countries’ revenue stems from oil production.
Deutsche Bank and the International Monetary Fund say Libya would need $184/barrel to balance its budget,Nigeria would need $123/b to balance its spending plans.Nigeria’s oil output was already falling before the drop in oil prices largely due to oil theft and pipeline vandalism in the oil-rich Niger Delta.Nigeria’s oil unions suspended a four-day national strike after the government agreed to discuss their demands including an immediate passage or the petroleum industry bill.
While the unions may well be taking advantage of the political climate ahead of the February 14 elections to boost their bargaining powers, these demands are unlikely to be resolved any time soon and will be issues for the next government.
President Goodluck Jonathan will face a tough battle to win re-election February 14 against former military ruler Muhammadu Buhari, the candidate for the main opposition party, who are looking to take power for the first time since the return to civilian rule in 1999.
