By Ed Cropley
JOHANNESBURG, Nov 27 (Reuters) – Plunging world oil prices have dealt a blow to Africa far greater – in purely economic terms – than Ebola, setting back investment in exploration and plans to industrialise.
The highest profile victim so far has been Africa’s top producer, Nigeria, which was forced to devalue its naira currency by 8 percent this week after the central bank admitted dwindling reserves were making it hard to defend it.
In dollar terms, the devaluation knocked $40 billion off the value of Nigeria’s economy – considerably more than the $32 billion worst-case scenario the World Bank projected in October for Ebola’s economic impact on the entire sub-Saharan region.
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Oil price plunges after Opec split keeps output steady
Oil prices have crashed to a new four-year low, below $72 per barrel, after a major split inside Opec forced the cartel to hold production at current levels rather than make cuts to try to turn the market around.
The Opec oil price still matters (just not as much as before)
Opec has less clout than it once did, partly due to the importance of non-Opec producers such as Russia and partly because of the shale revolution in the US. Members of the cartel have different interests, with Saudi Arabia better placed to deal with lower prices than Venezuela or Iran. But Opec still matters: witness the fall in oil prices as it became clear that there would be no production curbs emerging from the current meeting in Vienna.
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