Africa’s petrostates are crashing hard

Falling oil prices have had a dramatic impact on Africa’s petrostates. A cool $115 in the summer of 2014, a barrel of Brent crude, the international pricing benchmark, now fetches below $40. And having failed to build massive foreign exchange reserves like Saudi Arabia or other Gulf monarchies, African oil exporters are now being forced to grapple with depreciating national currencies, mounting inflation, and deep cuts in government spending.

Some of these states are now dangerously unstable, staring down popular unrest or domestic insurgencies that left unaddressed could set them back years, if not decades, in development terms.

DIIS senior researcherLuke Pateywrites in Foreign Policy that the fall in global oil prices is leading to a gradual shift in the continental balance of economic power in Africa — away from petrostates like Nigeria and Angola and toward less flashy but more diversified economies like Ethiopia and Tanzania.