Responding to the impact of coronavirus on the economy, the Federal Government of Nigeria on Wednesday announced a reduction in the 2020 budget by N1.5tn.

Last week Monday, President Muhammadu Buhari set up a committee chaired by the Minister of Finance and National Planning, Mrs Zainab Ahmed to assess the impact of coronavirus on the economy.

Other members of the committee are the Minister of State, Petroleum Resources, Mr Timipre Sylva; Governor of the Central Bank of Nigeria, Mr Godwin Emefiele; and the Group Managing Director of the Nigerian National Petroleum Corporation, Mr Mele Kyari.

The committee’s recommendation has already been approved by the President and over N457bn the government spends on fuel importation under the name of “under-recovery” is included in the N1.5tn reduced from the budget.

Speaking with State House correspondents after the Federal Executive Council meeting in Abuja on Wednesday, Ahmed expressed hope that the measures would help stabilise the economy.

According to her, the recurrent expenditure would be cut by 25 per cent across all the Federal Government’s agencies, while the capital budget would drop by 20 per cent.

“What we have done is that we have written every ministry and given them guidelines on how these adjustments will be made to enable us to have detailed input from the ministries. But, I can just say that the budget cut is about N1.5tn; the reduction in the size of the budget. And this includes the N457bn from the PMS under-recovery,” she stated.

On how much it will affect the federally-funded upstream projects, she said: it is about 25 per cent cut and the exact amount, will be worked out when as soon as the ministries, departments and agencies have made their input.

In addition to the reduction of 2020 budget, the Finance Minister also stated that the government has responded to the oil price crash by setting a new benchmark of $30 per barrel, down from the budgeted $57.

Other measures taken by the Federal Government are the suspension of the funding of upstream projects by the Nigerian National Petroleum Corporation; the reduction in the revenue projection of the Nigeria Customs Service by N1.5tn; and the suspension of all ongoing recruitment by the MDAs.