Reliance on oil exports restricts sub-Saharan African countries' ability to import agricultural commodities

Most sub-Saharan African countries derive almost all export revenue and foreign exchange from high-value commodities such as oil. When the price of oil drops significantly, commodity-dependent countries’ foreign exchange reserves are diminished. When this occurs, countries that would normally import higher volumes of agricultural commodities such as wheat or poultry instead seek cheaper, alternative sources of agricultural goods. Africa’s two largest oil-producing countries, Nigeria and Angola, are particularly sensitive to changes in the price of oil. For instance, in the two years after oil prices dropped in 2014, U.S. exports of wheat to Nigeria and poultry to Angola fell from the previous year by an average of 37 percent and 40 percent, respectively. More recently, the onset of the Coronavirus (COVID-19) pandemic caused a decline in oil prices of 42 percent—the second-greatest drop in oil prices since World War II. This drop in oil prices led to a 34-percent decline in U.S. wheat exports to Nigeria and a 46-percent decline in U.S. poultry exports to Angola. Such volatility has consequences on economic development and can compound food insecurity. This chart first appeared in USDA’s Economic Research Service COVID-19 Working Paper: Single Commodity Export Dependence and the Impacts of COVID-19 in Sub-Saharan Africa, released in May 2022.

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