Lower oil, commodity prices to curb economic growth in Angola, Ghana

The economies of African oil producers Angola and Ghana are set to expand by more than 7 percent this year but growth will be less robust than last year as lower oil and commodity prices weigh, a Reuters poll showed. Growth in both countries has been driven in part by rising oil production and a drop in the oil price prompted analysts in the poll to cut their 2013 economic outlooks from previous polls.
Ten analysts polled on Angola forecast Africa's second-largest oil producer, would expand 7.0 percent this year, down from an estimate of 7.4 percent in a poll taken in March. However, they lifted their forecasts for next year, predicting 7.2 percent growth, up from 6.4 percent in the March poll.
"We have dropped our growth forecast due to the bearish outlook for oil prices - Angola's economy is highly dependent on the oil sector," said Celeste Fauconnier, Africa analyst at Rand Merchant Bank. Oil contributes around 80 percent of Angola's export revenues. That helped its economy expand 8.4 percent last year, according to an IMF estimate, but also means unexpected shocks in global energy markets can have big repercussions. To help insulate itself, Angola launched a $5 billion sovereign wealth fund in October to invest in domestic and overseas assets by funnelling oil wealth into infrastructure, hotels and other projects to diversify its economy outside the energy industry.
Analysts also trimmed their forecasts for Ghana, projecting its economy will grow 7.5 percent this year, down from 7.7 percent in a previous poll in February. Ghana, which grew 7.9 percent last year, is benefiting from the expansion of its oil and gas sector since its Jubilee fields began operation in November 2010. But weak gold prices, down by nearly a quarter this year, and loose fiscal policy remain risks. The poll forecast economic growth will dip to 7.3 percent in 2014, down from a projection of 7.4 percent in the February poll.
"We remain bullish on growth due to expected increases in oil and gas production and the strong performance of the agricultural sector," said Rand Merchant Bank's Fauconnier. "The drop in gold prices, however, is a major risk to our outlook as the sector attracts a large piece of export revenue for the country." Analysts have slashed their 2013 gold price forecasts after sharp falls earlier this year and expect them to remain weak in 2014.