Oil addicts withdrawal symptoms

Falling oil prices are threatening several countries on the African continent.

 “The high debt overhang and the heavy reliance on raw materials (such as oil) and minerals for exports, makes African economies susceptible to shock and systematic risks,” Dr. Kwame Akonor, from the African Development Institute said. According to Akonor, the heaviest toll will be paid by Nigeria, the largest economy in Africa, which depends on oil for about 80 percent of its total revenues.

Algeria, Equatorial Guinea and Gabon will also suffer significantly from the plummeting oil prices, as these economies are also heavily dependent on oil revenues.

Ghana's president announced earlier this week that infrastructure plans could be scaled down due to the budgetary price of oil and the current fall. An article published by the Brookings Institutions shows that countries like Cameroon, South Sudan and Chad had drafted their budgets assuming record-high prices of over US$100 per barrel.

According to the Financial Times, conflict-stricken South Sudan is now receiving the lowest oil price in the world at US$20-25 a barrel because of the combination of falling prices and unfavorable pipeline contracts.

Several Western oil giants are halting ambitious exploration and exploitation projects throughout the region until oil prices recover.