COVID-19: Faced with a Violent and Long-lasting Shock, African Oil Countries are Improvising the Rescue of their Economy

While the Brent oil prices in London have been fluctuating between 20 and 35 dollars per barrel for several weeks, and while American oil prices in New York even reached negative values on 20 April, most African oil-producing countries have, at the end of 2019, passed their 2020 budgets on the basis of rather optimistic forecasts, sometimes betting on an increase in expenditure financed by borrowing (Nigeria). Some of these countries were expecting Brent prices to be rather high in 2020, following the curve observed in 2019 where the annual average was around $64 per barrel. Nigeria, for example, had bet on a record budget of 10.59 trillion naira ($35 billion), with a deficit in the order of $7.2 billion - (with a reference barrel at $57). Similarly for Gabon, which in December 2019 had forecast a budget that would grow by 9.8% to reach CFAF 3330 billion (just over 5 billion euros), based in particular on the fact that oil production would increase thanks to the Dussafu block, which has just started production. The Congo, for its part, was betting on an assumption of a barrel at $55 with a rather conservative budget, knowing that the debt already reaches more than 80% of the GDP and that the economy is drip fed by the International Monetary Fund (IMF). Ghana, which has been an oil producer since 2010, was expecting growth of 6.8% in 2020, with a barrel at 62.6 dollars. Algeria, in contrast to its neighbours in the Gulf of Guinea, had, on the other hand, already forecast a 9.2% drop in spending, including 20% less investment between 2019 and 2020. This singularity among African producers is due to the fact that Algeria was already in crisis in 2019 and was forecasting a drop in revenue of more than five billion dollars from one year to the next, caused in particular by the decline in hydrocarbon exports