Not all Africa’s oil-producing countries are poised to benefit from elevated oil prices due to their inability to meet their production targets and the strain put by soaring food prices on their budgets, according to a leading global research institution.

“These countries will ride the tailwinds of higher export prices, but not all will benefit from larger export volumes, given their inability to reach their assigned Opec+ targets,” Oxford Economics said in a briefing on Thursday.

The report focuses on the continent’s seven oil-exporting countries: Algeria, Angola, Gabon, Libya, the Republic of the Congo, Equatorial Guinea and Nigeria. Charts in the briefing show that all of these countries except Algeria and Gabon were already incapable of meeting their production quotas in February.

Oxford Economics forecasts oil price to average $96.3 per barrel in Q1 2022 and $100.2 per barrel in 2022, numbers that exceed most African countries’ fiscal break-even and budgeted market prices. Hence, these countries are expected to experience “some fiscal reprieve”; however, a lack of investment in oil production will prevent many of these countries from raising their output, according to the report.

Meanwhile, these countries have to navigate the inflationary waves caused by the ongoing war in Europe. “Many African oil-producing countries are net commodity importers, and they also maintain large amounts of subsidies on various food products – which always take a large chunk out of the budget,” read a recent briefing by Oxford economics.

(Reporting by Noha El Hennawy, editing by Seban Scaria) seban.scaria@lseg.com