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Can African Economies Weather the Storm?

The spread of the coronavirus and tumbling oil prices could trigger a capital exodus from Africa, where governments have few tools available to battle external shocks, according to Fitch Ratings. Top oil exporters such as Nigeria and Angola are especially vulnerable to the plunge in crude. The commodity lost about a quarter of its value on Monday after major producers disagreed on supply cuts to counter lower demand as the spread of the virus weighs on global commerce, Mahmoud Harb, a director at Fitch, said in a telephone interview Tuesday. “The souring sentiment does not only affect financing in international markets, it could also lead to portfolio outflows where investors have invested in local-currency debt in countries like Nigeria, Egypt, Ghana and South Africa,” Harb said.