The International Monetary Fund has advised Nigeria to curtail spending so as not to put pressure on the benchmark for crude oil.
The position of the IMF was stated on Thursday in Abuja by its Senior Resident Representative in Nigeria, Scott Rogers, when he spoke with newsmen on the Regional Economic Outlook.
Rogers said: “Higher benchmark price most often determines how much of the oil revenue gets distributed.
“If oil revenue gets distributed, it doesn’t mean you have to spend it.
“So, generally raising the budget reference price means more money gets distributed to the different tiers of government and what it then means is these governments can spend the money.
“And if you spend the money, then again you have the adverses on the economy because you have government paying salaries, buying vehicles, gas and all these put pressure on price rates.
“The lower the budget reference price of oil, the lower government spending.
“Assuming that you actually save the difference, which means you don’t put it in the Excess Crude Account and take it back out again, you put it the Excess Crude Account and you leave it there.
“And that’s the way it was designed and that is the only way it really has an impact.’
The IMF said the Central Bank of Nigeria needs to strengthen already existing policies for the country’s economy to grow further.
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