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Impact of failed OPEC oil deal on African producers

Impact of failed OPEC oil deal on African producers

Business

African countries are under pressure following the failure on Sunday by the world’s big oil producers to agree on stabilising oil prices after months of uncertainty.

The Organisation of Petroleum Producing and Exporting Countries (OPEC) met in Qatari capital of Doha, and were bent on agreeing that average daily crude oil production in upcoming months should not exceed levels recorded in January.

The absence of Iran was cited as one of the main reasons why negotiators could not reach an agreement.

Although the close to six hours of negotiations were futile, the oil producers remain engaged in consultations before another meeting scheduled for June this year.

The reduction in oil prices has affected African countries which depend largely on oil revenue.

This has made things difficult for them as the countries have to cut expenditure to ensure their economies cope with tough economic conditions.

On a general note, the oil crisis is causing African countries to strain budgets, and triggering cuts in social spending.

The situation is even more pathetic for war torn countries.

Many African oil producers have turned to international lenders to help rescue their economies.

Nigeria, one of Africa’s largest oil producer has engaged on partnerships to help finance major development projects in order to escape a budget deficit.

Various African governments are responding to the crisis in different ways with the aim of ensuring the world’s second-fastest growing region remains on its development track.

Some experts say that the situation could get back to normal by mid-2017.

Agencies