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.

Global oil demand is set to contract this year for the first time in more than a decade as the coronavirus outbreak causes global economic activity to stall, the International Energy Agency said on Monday. The downward revision came as oil prices dropped as much as a third after Saudi Arabia launched a bid for market share following the collapse of an output pact with Russia.

"There will be reduced revenue on the budget and it will mean cutting the size of the budget," finance minister Zainab Ahmed said in the capital Abuja after a meeting with President Muhammadu Buhari.

She added that she would be part of a committee, also including the minister of state for petroleum, the head of state oil company NNPC and the central bank governor, that would determine the size of the budget cut in the coming days.

Crude oil sales make up around 90% of foreign exchange earnings in Nigeria, Africa's top oil producer. The 2020 budget, passed in December, was calculated assuming crude production of 2.18 million barrels a day at a price of $57 per barrel. (Reuters)