On Friday, March 6, we witnessed a new historic fall in the price of a barrel of oil. Producing African countries such as Algeria, Nigeria and Angola have a difficult year ahead if prices remain at their level.

We have to go back to July 2017 to see oil prices at such a low level. This Friday, March 6, the barrel of Brent from the North Sea reached 47.73 dollars on the London market, around 11:00 GMT.

This price was reached at the end of a bearish phase which began three days ago, but which is part of a heavier trend linked to the appearance of the Coronavirus epidemic.

The decline could increase in line with news related to the spread of Covid-19. And even today, this news is not good, since the whole world is preparing for a large-scale pandemic. The question is no longer whether such and such a place in the world will be affected, but when and to what extent it will be.

If the net hydrocarbon importing countries, such as Morocco, Senegal, Ethiopia and Kenya, are delighted with this fall, the exporting producers including Algeria, Nigeria and Angola are looking gloomy.

In designing its 2020 budget, Algeria was counting on a barrel of Brent at 60 dollars, which is relatively far from the current level. However, even with 60 dollars, equilibrium could not have been reached either for the public budget or for the external balance.
The former Algerian Minister of Finance, Mohamed Loukal, indicated Thursday, November 7 before the deputies during a session of questions and answers relating to the draft finance law 2020 that the deficit of the state budget was 1.533 billion dinars (11.7 billion euros, or 7% of GDP), while that of the Treasury amounted to 2,435 billion dinars (18.4 billion euros, or 11.4% of GDP).
Loukal explained the difference of nearly 900 billion dinars (6.8 billion euros) between these two deficits by the coverage, by the Treasury, of the deficit of the National Pensions Fund (CNR) which he now estimates at 700 billion dinars (5.3 billion euros) per year.
"With the absence of short-term reserves and the non-application of medium- and long-term reforms, it could reach 800 billion dinars [6 billion euros, editor's note] in 2021 and will widen with an annual average of 2.5%, or even 3% throughout the next decade,” said the minister.
According to him, "it was no longer possible to count on the assistance of the State budget to cover this deficit in a complete and permanent manner".
This observation for Algeria is valid for both Nigeria and Angola. The three countries will have to speed up their recourse to international financing, from the World Bank, the IMF, the African Development Bank or even Arab funds.
Since yesterday Thursday March 5, the ministers of the oil-producing countries, those of OPEC and non-OPEC, have met in Vienna, Austria, within the framework of a meeting which ends today Friday 6, which is chaired by the Algerian Minister of Energy, Mohamed Arkab.
The latter did not hide his concern in his preliminary statements. "In view of the situation of the oil market which is extremely serious, Algeria calls for concrete, credible, united and rapid action so as not to annihilate all the efforts made since 2016 by the signatory countries of the Declaration of Cooperation “, he said before traveling to Vienna.
In particular, he recalled that current prices are very far from the 65 dollars at the beginning of the year, which risks harming the economies of all producing countries.
Since the fall in oil prices in 2014, the country's foreign exchange reserves have fallen from 179 billion dollars at the end of 2017, to 62 billion in December 2019, according to the Bank of Algeria's economic situation notes for the same periods.