When coronavirus forced the world into lockdown, it punched a hole in global oil demand and sent prices crashing to historic lows. The result was an overnight fiscal catastrophe for oil-dependent African economies like Nigeria that were accustomed to building their budgets on oil prices double what they are now.
But it also sent shockwaves through relative newcomers to the oil and gas game—including Senegal, Mozambique, Uganda, and others—that had pinned their economic aspirations on major drilling projects that were still in the works. Dozens of those plans are now up in the air, as the public health impacts of the virus present a massive unanticipated expense.
Fossil fuels have always been a dicey value proposition for countries with natural reserves. Oil and gas are some of the world’s most valuable commodities, capable of attracting billions of dollars in foreign investment. In theory, that money could translate to jobs, roads, airports, and other tangible signs of economic development for countries that are otherwise strapped for cash.