Page 69 - Vol 33 Issue 34 2021

Insight oil

loans. The deficits reduced funding to fight the mil lion people in fec ted of which over 2.26 million peoples’ liberties. As the men who control
virus. Still, Nigerians, a dynamic people who for have recovered. The death toll is high; the vi rus these governments confront a reduction in
decades suffered under brutal dictatorships, now has killed 73 415. The South African economy, revenues, their incentives may actually be to
enjoy representative democracy. Indeed, Nigeria like Ghana, Angola, and Nigeria has slowed. seize more rents and reduce expenditures in
has an enormous informal sector that, according To no less an extent, Congo, Chad, Equatorial health and education. A tragic development in
to some measures, dwarfs its formal economy. In Guinea and Gabon experienced a decline in the post-COVID-19 reality in these countries,
the post-COVID Nigeria, these impulses may be oil exports and revenues. However, economic and other authoritarian Africa oil exporters, may
expected to continue. diversification was hardly a fact among the be a reduction in liberties, transparency, and
former cocoa exporters in Equatorial Guinea, accountability.
Angola the cotton producers in Chad, or the loggers in
Congo and Gabon. These countries confront a John R. Heilbrunn, is Associate Professor,
When the effects of COVID-19 hit Angola, the strong possibility of a return to poverty. In these The Colorado School of Mines
country’s economy was already in a marked countries, the global pandemic is having an
slowdown. Although an economic boom had immediate and severe effect.
followed the end of the 27-year civil war in 2002, How COVID-19 is affecting the long-term
declining oil production after 2017 reduced its development of these countries may be
fiscal revenues. Angola possesses reserves of 9.5 a retrenchment of authoritarian regimes.
billion barrels that are almost entirely in deep- Whereas the economies of Nigeria, Ghana, and
water blocks located in the Lower Congo Basin. Angola may expect continued growth, albeit
According to OPEC, in 2019, Angola earned at a slower rate; Chad, Congo, Gabon, and
50% of its GDP from oil, which constituted 89% Equatorial Guinea are especially vulnerable to
of its exports. In 2019, before the pandemic, the economic downturn that bode poorly for their
IMF reports that prices for Angolan oil declined
8% from 2018 and there was a 6.5% drop in
production. The price volatility depressed
production and forced the government to pass
a conservative budget for 2020 that anticipates
continued reductions in oil production and
earnings. In June 2020, the National Assembly set
a benchmark price of $37.00 a barrel. Even these
cautious figures leave the country vulnerable to
unanticipated impacts of COVID-19.
Other producers post­
COVID­19

South Africa is a democracy and a minor oil pro-
ducer. It is Africa’s second largest eco no my with
abundant natural resources and a po pu lation of
58.6 million people. It sadly has among the high-
est infection rates on the continent with over 2.48

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MDA Ad.indd 1 2019/11/28 09:50
AFRICAN POWER Mining & Oil Review Vol33 Issue 34 2021 | 69