DUBLIN & NEW YORK--(BUSINESS WIRE)--Top oil producing countries in Africa -- Nigeria, Algeria and Angola -- have been hurt badly since 2014 by both the global recession and the collapse of oil prices. These trends have exposed many cyclical and structural problems including losses in fiscal receipts, fiscal underperformance, and overly concentrated revenues, and have led to currency depreciation, soaring inflation, and falling international reserves. Negative developments were somewhat reversed in 2017 with a return to economic growth in all three producers thanks to the rebound in energy prices. Synchronised global growth and heightened geopolitical tension in the Middle East are providing a boost to the outlook for energy prices, suggesting strong oil prices are likely to continue over the medium term. In this macro market research piece, we discuss developments underpinning the improved oil price outlook, breakeven oil prices needed to balance the fiscal accounts, the role of fiscal policy in determining deficits, and constraints on necessary revenue diversification in all three economies.
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