In the face of dwindling oil revenues, the Federal Government of Nigeria has proposed the reduction of the crude oil benchmark for 2020 budget from $57 to $30 per barrel.
The Minister of Finance, Zainab Ahmed, proposed a review of the 2020 budget using a $30 per barrel price benchmark against $57 initially passed by the National Assembly.
The proposal was announced at a meeting between the executive arm of government and the leadership of the National Assembly, meant to discuss the review of the 2020 budget and (MTEF) Medium Term Expenditure Framework, particularly against the background of the impact of the Coronavirus pandemic on the global economy.
The Finance Minister 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.”
“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.”
Ahmed also disclosed that the Federal Government has undertaken cuts to Revenue-related expenditures for the NNPC for several projects included in the 2020 Appropriation Act passed by the National Assembly in December 2019.