Warn­ing sig­nal for oil pro­duc­ers

The Star Early Edition - - BUSINESS REPORT -

AFRICA’S big­gest oil pro­duc­ers had debt lev­els low enough to with­stand slump­ing crude prices, while Ghana faced risks with­out an aid pack­age and Zam­bia from an un­ex­pected elec­tion, Fitch Rat­ings said. Nige­ria and An­gola were able to post bud­get deficits for the next year or two be­cause of their low debt, en­abling them to main­tain spend­ing with lower oil prices, Car­men Al­tenkirch, a di­rec­tor of the sov­er­eign group at the agency, said last week. That space might nar­row after a few years, she said. “Nige­ria and An­gola have the fis­cal space to run deficits in the re­gion of 4 to 5 per­cent of GDP [gross do­mes­tic prod­uct] for a few years with­out un­der­min­ing fis­cal sta­bil­ity,” she said. “How­ever, if oil prices re­main lower for longer, fis­cal pol­icy may need to be tight­ened to avoid down­ward pres­sure on the rat­ing.” Slump­ing crude prices pushed the naira to a record low last week, prompt­ing pledges from cen­tral bank of­fi­cials that they will con­tinue us­ing for­eignex­change re­serves to bol­ster the cur­rency. An­gola on Wed­nes­day cut its es­ti­mate for 2015 oil out­put to 1.83 mil­lion bar­rels a day from 2 mil­lion. Fitch rates Nige­ria and An­gola BB-. – Bloomberg

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