Oil prices hit African inflation

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With a number of other problems facing them, African nations are also having to deal with the consequences of increasing oil prices. This is true in different ways of non-oil producing nations and for the nations that do have oil resources, although the problems are different from the two groups of countries. In the oil-producing nations, increased income from oil revenues and increased investment as new oil fields are developed can cause their currencies to appreciate more than their economies can handle. In addition, other sectors suffer because as long as the oil money keeps flowing, these nations often see little reason to spend time and money developing other industries and resources. On the other hand, in non-oil producing nations the problems come in the form of higher costs and higher inflation. Manufacturers must pay more for the energy to run their operations, while ordinary people must pay more for the energy to light their homes and to cook their meals. Consumers are charged higher prices for goods because transport costs that keep rising are passed on to those who purchase the goods. With higher prices comes inflation. In Kenya, for example, higher oil prices were a big factor in the 16 percent rate of inflation in the year ending in June, the highest inflation rate in over a decade and well over the single digit inflation of the previous year.