The Economic and Political Consequences of Falling Oil Production in Sub-Saharan Africa by 2030 Etudes de l'Ifri, June 2021
The sharp rebound in oil prices since the second half of 2020, to nearly $70 per barrel in May 2021, represents only a temporary respite for oil-dependent African economies that must change their economic model very quickly.
The COVID-19 crisis has weakened the oil economies of the Gulf of Guinea even more than those of other African countries, aggravating a situation that had already become critical as of 2014-2016, the previous period of oil price crisis. While all of Africa’s Organization of the Petroleum Exporting Countries (OPEC) producers entered in recession in 2020, other historically low-volume producers were much less affected by the economic consequences of the pandemic and avoided economic recession.
With oil reserves plummeting, depleted deposits, and high production costs, almost all of the Gulf of Guinea’s oil-producing countries need to reform their hydrocarbon sector to try to retain or attract companies that can make large investments as appropriate. This is the case for Cameroon, Gabon, Congo, Equatorial Guinea, Côte d’Ivoire, Angola, and the Democratic Republic of Congo (DRC). Elsewhere in sub-Saharan Africa, this is also true for Sudan and South Sudan, and even for countries with relatively small deposits (Niger and Chad). Finally, it concerns production areas located in deep or very deep offshore fields (Nigeria and Angola).