Nigeria’s cabinet endorses reduction of 2020 Budget by N71.5billion

Nigeria’s Federal Executive Council has approved the amendment of the 2020 Budget cutting it from N10.59 trillion to N10.523 trillion, a difference of about N71.5billion to enable the country to respond to the COVID-19 pandemic.

Minister of Finance, Budget and National Planning, Zainab Ahmed, stated this while briefing the media on the outcome of Wednesday’s virtual cabinet meeting presided over by President Muhammadu Buhari.

She said the approved amendment to the 2020 Budget, which President Buhari signed into law in December last year, pegged oil price at US$25 per barrel, while Nigeria’s crude oil production quota was fixed at 1.94million barrels per day.

Ahmed said the amendment put the exchange rate of the naira to the dollar at N360 to the one dollar.

The meeting also approved the amendment of the Medium Term Expenditure Framework of 2020 to 2022 with the same parameters.

“The revised budget is now in the total sum of N10.523 trillion, a difference of about N71.5billion when compared to the approved budget. 

“This is because as we cut down the size of the budget, we also have to bring in new expenditures that were previously not budgeted to enable us to adequately respond to the COVID-19 pandemic. 

“The federal government from this budget will have direct revenue for funding the budget of N5.158billion,” she explained.

Budget Deficit
The Finance Minister explained that there would be a deficit of N5.365 trillion in the amended budget, which would be financed by both domestic and foreign borrowing.

“The foreign borrowing we are doing for 2020 are all concessionary loans from the IMF, which had already progressed, approved and crystallized; from the World Bank, from the Islamic Development Bank as well as from AFREXIM Bank. 

“There will also be some draw down of previously committed loans for major ongoing projects that we will be drawing from the existing facilities as well as drawing from some special accounts with the approval of the president and the NASS and also revenue that we expect to realize from privatization. 

“So, the borrowing, the multi-lateral loans draw down, funding from special accounts and funding from privatization will fund the fiscal deficit of N5.365 trillion that we have in the proposed amendment for the 2020 Budget,” she said.

Economic Stimulus
Mrs. Ahmed said that the Economic Sustainability Committee, chaired by Vice President Yemi Osinbajo was working to develop a 12-month economic sustainability plan that will prioritize made-in-Nigeria products to boost the Nigerian economy and to save foreign exchange.

“We have prioritized spending in that plan to use and consume made-in Nigeria products. 

“For example, some of the public works that will employ a lot of our youths is to be done strictly using local raw materials; so, we don’t need to import bitumen for example to build our roads,” she noted.

Custom’s surveillance
According to the Minister, Wednesday’s cabinet meeting also gave approval the request of the Nigeria Customs Service, NCS, to buy three boats.

She said the boats, which are manufactured in Nigeria, would be for the surveillance and anti-corruption activities of the NCS.

Source: Voice of Nigeria