Nigeria to revise 2020 budget due to oil price slump

The record budget of Nigeria, Africa’s largest oil producer estimated at 34.6 billion dollars for the year 2020 will be revised downwards, according to the Ministry of Finance. This is due to the sharp drop in the price of crude oil.

World oil demand is expected to contract this year for the first time in more than a decade, as the coronavirus epidemic is causing a blockage in economic activity, the International Energy Agency disclosed on Monday.

Another trigger effect of the crisis on the oil market is the tensions between Saudi Arabia and Russia, two OPEC heavyweights that have caused the production pact between the two countries to collapse.

The 2020 budget, adopted in December, was calculated assuming crude oil production of 2.18 million barrels per day at a price of $57 per barrel.

Nigeria is still struggling to emerge from the 2016 recession, which was caused by the collapse of oil prices at the end of 2014, with economic growth currently hovering around 2%.