Africa’s biggest oil producers had debt levels low enough to withstand slumping crude prices, while Ghana faced risks without an aid package and Zambia from an unexpected election, Fitch Ratings said. Nigeria and Angola were able to post budget deficits for the next year or two because of their low debt, enabling them to maintain spending with lower oil prices, Carmen Altenkirch, a director of the sovereign group at the agency, said last week.
That space might narrow after a few years, she said. “Nigeria and Angola have the fiscal space to run deficits in the region of 4 to 5 percent of GDP [gross domestic product]for a few years without undermining fiscal stability,” she said. “However, if oil prices remain lower for longer, fiscal policy may need to be tightened to avoid downward pressure on the rating.” Slumping crude prices pushed the naira to a record low last week, prompting pledges from central bank officials that they will continue using foreign-exchange reserves to bolster the currency. Angola on Wednesday cut its estimate for 2015 oil output to 1.83 million barrels a day from 2 million. Fitch rates Nigeria and Angola BB-.
