Africa’s commodity-exporting countries are primed to benefit from the impact of the invasion of Ukraine by Russia, according to experts.
Commodity prices including oil, gas, maize, and wheat—top global exports for the two countries in conflict—have begun rising on fears over the impact of sanctions slapped on Russia.
Brent crude oil rose to $130 a barrel on Mar. 8, as the price of natural gas began to skyrocket across Europe on war-induced disruption of global supply chains.
Africa’s oil and gas exports
“African oil producers stand to benefit from higher oil prices as their fiscal positions are closely correlated to oil exports and the international oil price,” said Oxford Economics Africa analysts in their monthly highlights.
A few African countries stand to gain from anticipated spikes in commodity prices, as the Russian invasion of Ukraine begins to disrupt global supply chains.
Nigeria, with an oil production capacity of 1.36 million barrels per day will likely be the biggest beneficiary followed by Libya (1.17 million) and Angola (1.14 million,) barrels per day.
Similar sentiments have also been echoed in the African Energy Chamber first quarter 2022 Outlook, that projects increased activities in oil and gas exploration would unlock the continent’s potential in meeting global energy demand and shore up foreign investments.
“Current trends within the oil and gas industry could lead to the establishment of new centers of geopolitical influence, a development that could see massive amounts of investment for exploration heading towards Africa,” says Leoncio Amada Nze, president at African Energy Chamber CEMAC.
A total of nine high impact wells are in the drilling schedule for 2022 by a mixture of majors, independents, and local exploration firms, according to the outlook, with the main ones being in Namibia and Kenya.
In 2023, the authors of the outlook says 10 additional high-impact wells will be drilled and the majority of them are situated in unexplored basins in east and west Africa.
Africa’s grain exports
The Oxford Economics Africa analysts also suggests that Africa’s major grain producing countries like South Africa, Namibia, Mozambique, and Zimbabwe stand to benefit from favorable terms of trade shocks resulting from anticipated higher prices of cereals.
Already the Food and Agriculture Organization (FAO) had in September last year projected that Africa would break its five-year record by 6%, to produce 218 million tons of cereals in 2021.
FAO’s quarterly Global Crop prospects and food situation 2021 forecast that cereal production in southern African countries would rise 22% above the 2016-2020 average, to 40.6 million tons.
In South Africa, production of maize and other cereals like wheat is seen reaching 19.5 million tons, a 24% growth above last five-year average, which FAO says will be the second largest harvest recorded over the period.
In Zimbabwe, the maize harvest has also increased to an above-average level of 2.7 million tons, nearly tripling the 2020 output level, as sorghum and millet production soars in the country.
Maize harvests in Malawi and Zambia, are estimated at 4.1 million and 3.6 million tons respectively this year.
The original version of this story was republished with the permission of bird, a story agency under Africa No Filter.
Credit | The Quartz Africa