WASHINGTON, D.C.: The International Monetary Fund (IMF) said on Wednesday (Thursday in Manila) the plunge in oil prices will force significant fiscal adjustments on Africa’s oil exporters.
The IMF said the 70 percent fall in crude prices over the past 18 months has been a “formidable shock” to sub-Saharan African oil exporters like Nigeria and Angola, given their heavy reliance on oil receipts in state revenues.
“While most oil producers have low levels of debt and adequate levels of reserves, the massive oil price decline makes adjustment to the new environment inevitable,” an IMF spokesperson said in an emailed statement to Agence France-Presse.
The Fund said it is working with the affected countries on how to adjust economic policies in response to the fall in oil income.
“These vary depending on country-specific situations, but in most cases, fiscal adjustment will be needed,” the Fund said.
Nigeria, the largest African economy and largest crude exporter, has already approached the World Bank and African Development Bank for assistance to shore up its finances.
The IMF said that it had not received any new request for financial assistance from sub-Saharan African oil exporters.
“We indeed stand ready to assist the authorities, should such a request materialize,” it said.
In a visit to the Nigerian capital Abuja in January, IMF Managing Director Christine Lagarde said the Fund was not negotiating a loan program with the country.
“Frankly, given the determination and resilience displayed by the presidency and his team, I don’t see why an IMF program is going to be needed,” she said at the time.