By Chinwendu Obienyi

Economic experts have warned that the prolonged tension between Russia and Ukraine, may primarily bring back the dreaded global economic recession and stagflation that may affect external accounts of some African countries.

The escalating war between the two East European countries has sent oil prices to new highs, with the Bonny Light breaking the $100 per barrel resistance level on February 24 for the first time since 2014. 

This has left oil traders concerned about the prospect of supply in a market where demand is rising rapidly, as factories and broader economies open up to recover from the doldrums of COVID-19 restrictions. 

Furthermore, there have been reports that members of the Organisation for Petroleum Exporting Countries (OPEC) are excited about the bullish rally in oil price as it gives hope of higher fiscal revenue, which may help to partly bridge budget deficits. 

However, analysts have stated that the conflict between the two countries could primarily impact inflation, the external sector account, and fiscal policy for Africa especially the Nigerian economy.

Speaking during a monitored interview, the Chief Executive Officer, Financial Derivatives Limited, Bismarck Rewane, said the conflict affects Africa especially Nigeria in four dimensions. “One is a fact that Africa is a dependent-commodity economy. In other words, it generates much of its revenue from commodity exports. Secondly, Africa relies mainly on China and Russia for financial support. Furthermore, Africa imports a lot of oil and so when the price of oil is increased, inflation in Africa also increases” he said.