Angola suffers from oil price slump
The slump in global oil prices since mid-2014 is taking its toll on Africa’s oil exporters. For instance, Angola has seen its realised and projected export earnings plummet and has been forced to revise down its fiscal revenue and spending plans by around US$14bn in its Budget 2015 proposals compared with estimates tabled in late 2014. Meanwhile, the state-owned oil company (Sonangol) published its preliminary results for 2014 at end-February and revealed its net profits had fallen to just US$710m in 2014, down 77% on the previous year. The fall in oil prices followed on from technical difficulties that interrupted oil and gas supplies, making for a very disappointing year for Sonangol. The company’s poor financial performance and gloomy outlook for global oil prices has prompted it to draw up plans to cut costs, seek efficiency gains and renegotiate contracts in 2015. Separately, the government is reaching out to international capital markets and foreign lenders to shore up its finances and keep the most essential parts of its development plans on track.