Nigeria may have to take greater debt to meet its yearly budget, amid an increasingly low oil price, which is crucial for government revenues, Sun News reports. Currently, Nigerian government’s borrowing amounts to N1.84t ($9.24b). The government had proposed a budget of N6.08t and projected domestic borrowing of N984b and foreign loans of N900b in 2016. Analysts think that the borrowing will need to be supplemented as the state budget was benchmarked on $38 per barrel oil price, while Brent prices have meanwhile dropped to around $32 per barrel.

President of the Nigeria Liquefied Petroleum Gas Association (NLGPA), Dayo Adeshina, said that Nigeria was overly ambitious in pegging its budget to a $38/barrel oil price.  ‘‘I would have expected the country to peg the oil price benchmark at $30. But now that the price is less than $33, that means we will have to increase our borrowings,’’ he said. Further, Adeshina advocated aggressive implementation of Nigeria’s gas master plan, saying that gas had the potential to turn around the Nigerian economy.

The news comes during IMF Director, Christine Lagarde’s visit to the country. Lagarde made it clear that she was not in the country to negotiate a loan with conditionality, rather calling for increased austerity. She added: “We are not into program negotiations and frankly, at this point in time, given the determination and resilience displayed by the President and his team, I don’t see why an IMF program will be needed.”