Feb. 13 (Bloomberg) -- Nigeria, Africa’s biggest oil producer, may scale back government spending plans this year as revenue from oil exports declines, Minister of State for Finance Remi Babalola said.

The country has “cause to be concerned about the implementation of the 2009 budget estimates,” Babalola told a meeting of state finance commissioners in the capital Abuja today.

The comments come after oil prices tumbled from a July peak and the Organization of Petroleum Exporting Countries cut Nigeria’s production quota to 1.88 million barrels a day from 2.29 million barrels. Nigeria earns 90 percent of its income from crude export.

The government may also borrow more money, or increase tax revenue from non-oil sources, Babalola said. The measures may become effective this month, he added.

The move is to be expected as the country’s position “remains vulnerable” with the current level of oil prices, said Mike Uzor, head of Datatrust Consult, a Lagos-based fund manager. “The struggle is for individuals and institutions is to survive.”

Crude for March delivery rose to $34.94 a barrel on the New York Mercantile Exchange today compared with its July record of $147 a barrel. The naira currency has lost about 20 percent in value since the monetary authority began limiting the supply of dollars on the foreign exchange market in November in order preserve the country’s foreign currency reserves.

President Umaru Yar’Adua based the 2009 budget on crude selling at no less than $45 per barrel when he presented this year’s spending plans to parliament on Dec. 2.

Before the impact of the global crisis hit the West African country, the government had projected the economy would grow by 8.9 percent this year. On Feb. 9, the governor of the Central Bank of Nigeria in Abuja, Chukwuma Soludo, said growth would slow this year, even as the economy avoided a recession.

To contact the reporter on this story: Paul Okolo in Abuja at pokolo@bloomberg.net

Last Updated: February 13, 2009 11:11 EST