Growth in Angola and Nigeria slow on weaker crude

Growth in Angola and Nigeria, the only sub- Saharan African members of Opec, would slow next year because of weaker crude prices, according to Fitch Ratings.

Fitch’s 2015 growth projection for Nigeria was revised down to 5.2 percent from 6.4 percent, Carmen Altenkirch and Richard Fox, sovereign analysts at the ratings company, said in a statement yesterday. Nigeria, along with Angola and Gabon, would also suffer from worsening current account and fiscal balances, they said.

Policymakers in Nigeria have proposed spending cuts and devalued the naira last month amid declining foreign reserves. “Most sub-Saharan African countries are significant oil importers,” they said. “Oil makes up around 20 percent of the import bill in Kenya, Cote d’Ivoire, Seychelles and Ethiopia.”

The rand firmed against the US dollar on Monday, recouping some recent losses after ratings agency Fitch surprised markets by not downgrading its credit view on Africa’s most developed economy.

Fitch said growing current account and budget deficits were restricting growth in South Africa’s economy but maintained its BBB rating, while Standard & Poor’s kept its rating at BBB-, one notch above junk status.

Analysts said this would provide only brief respite as they predicted South Africa’s credit status would be cut in the next six months.

Source: Bloomberg