And that’s setting off a dramatic shift in the economic balance of power on the continent.
Africa’s petrostates are crashing hard. 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. The “Africa rising” narrative, built on climbing income levels and an emerging middle class on the continent, is now under strain.
But instead of across-the-board decline, Africa is witnessing a gradual shift in the continental balance of economic power — away from petrostates like Nigeria and Angola and toward less flashy but more diversified economies like Ethiopia and Tanzania. After decades of lavishing attention on the oil-powered economies of West Africa, investors are now flocking to the economies of East Africa, which have demonstrated their resilience to lower commodity prices and challenged outdated perceptions of Africa as resource-dependent and burdened by irredeemably poor governance.
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WNU Editor: Nigeria is the big story .... its government receives 70% of its revenues from oil sales .... that money is gone, and so will the money that is used in combating Boko Haram and placating the militias in the oil rich Delta region.
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