Nigeria, Africa’s top oil producer, will cut the size of its record 10.6 trillion naira ($34.6 billion) budget for 2020 because of a sharp decline in the price of crude, the finance minister said on Monday.
Mathias Hindar, a sub-Saharan Africa analyst at consultancy Falanx Assynt, said persistently low oil prices would put pressure on the country’s “rapidly diminishing” foreign currency reserves and restrict funds for capital projects.
“We could see the government’s ability to protect the naira diminish, which could subsequently cause significant rises to inflation rates,” he said.
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