The Federal Government on Wednesday proposed the reduction of oil benchmark, upon which the 2020 budget was predicated, from $57 to $30 per barrel.
The Minister of Finance, Zainab Ahmed, announced this after a meeting between the executive arm of government and the leadership of the National Assembly in Abuja.
The meeting was meant to review the 2020 budget and Medium Term Expenditure Framework, particularly against the background of the impact of the Coronavirus pandemic on the global economy.
The meeting, which lasted almost four hours, according to the President of the Senate, Ahmad Lawan, was summoned to “discuss the proposed review of the 2020 budget and the Medium Term Expenditure Framework.”
The Finance Minister proposed a review of the 2020 budget using a $30 per barrel price benchmark as against $57 initially passed in December by the National Assembly.
She said it was part of the measures to prepare for the worst-case scenario, as well as insulate the Nigerian economy against any form of unexpected crisis.
She also told the leadership of the National Assembly that budgeted revenues for the Nigeria Customs Service have been reduced from N1.5 trn to N943bn “due to anticipated reduction in trade volumes”.
She also said, “The privatisation proceeds will be cut by 50 per cent, based on the adverse economic outlook on sales of the Independent Power Projects and other assets.”
Similarly, Ahmed disclosed that the Federal Government has undertaken cuts to Revenue-related expenditures for the Nigerian National Petroleum Corporation for several projects included in the 2020 Appropriation Act passed by the National Assembly in December 2020.
She said, “The Federal Government is working on Fiscal Stimulus Measures to provide fiscal relief for taxpayers and key economic sectors.
“We will incentivise employers to retain and recruit staff during the economic downturn.
“We will stimulate investment in critical infrastructure; review non-essential tax waivers to optimise revenues, and compliment monetary and trade interventions to respond to the crisis.”