African commodity exporters the unexpected winners of the Ukraine invasion

Russia’s invasion of Ukraine has pushed up already high prices for raw materials such as oil, gas, corn and wheat. An increase that will have a negative impact on the economies of many countries, while others will benefit. It is the case of African countries exporting raw materials.

African oil producers stand to benefit from rising crude prices due to their fiscal positions closely correlated to crude oil exports and the international price of oil, analysts at Oxford Economics Africa argue in their monthly report. Coinciding with these estimates, the African Chamber of Energy anticipates that this situation will serve to unlocking the continent’s potential to meet global energy demandcreate new centers of geopolitical influence and strengthen foreign investment.

In that sense, the biggest beneficiary will be Nigeriawith an oil production capacity of 1.36 million barrels per day, followed by Libya (1.17 million) and Angola (1.14 million), as published Quartz.

The drilling calendar for 2022 includes a total of nine high-impact wells, mainly in Namibia and Kenya. By 2023, another 10 high-impact wells are planned to be drilled, most of them located in uncharted basins in East and West Africa.

Others benefiting from the increase in the prices of raw materials will be the main African grain-producing countries, such as South Africa, Namibia, Mozambique and Zimbabwe. The forecasts of the Food and Agriculture Organization of the United Nations (FAO) point to an increase in cereal production in the countries of southern Africa by 22% above the average for the period 2016-2020, to exceed the 40 million tons.

“No” to the energy transition

Several African governments oppose moving away from fossil fuels to embrace renewable energy. According to the Nigerian Oil Minister, Timipre Marlin Sylva, the population of this region is immersed in their own transition from wood to gas, and asks them to let them carry it out. The country has been forced to reduce oil production from 1.8 million to less than 1.5 million barrels per day due to the lack of investment in the fight against climate change.

The Minister of Mines and Hydrocarbons of Equatorial Guinea, Gabriel Obiang Lima, for his part, assures that the pressure on renewable energy is “very unfair”. For him, before discussing how to approach this transition, it is necessary to overcome the energy security crisis.

Other developing countries with oil discoveries, such as Ghana, Guyana and Suriname, argue that they cannot be expected to give up the opportunity to benefit from the oil and gas that helped build more developed economiesas collected Reuters.