The Federal Government on Wednesday announced a slash in the 2020 budget by N1.5tn as part of measures to respond to the impact of coronavirus on the economy.
Included in the N1.5tn is over N457bn the government spends on fuel importation under the name of “under-recovery.”
The Federal Government also deregulated petrol pricing, directing the Petroleum Products Pricing and Regulatory Agency (PPPRA) to modulate pricing in accordance with prevailing market dynamics and further oil market development.
It also said it would reduce capital budget allocation by 20 per cent across the ministries, departments and agencies (MDAs) as well as 25 per cent cut in both the recurrent and capital budgets of government enterprises.
Subsequently, the Nigerian National Petroleum Corporation (NNPC) announced that its outlets would sell petrol at N125 from today, an N18 reduction from the N143 it sold up till yesterday.
These decisions were taken in reaction to the drastic fall in the price of crude oil in the international market caused by the outbreak of COVID-19 and trade war between Russia and Saudi Arabia.
A government’s panel set up to assess the impact of coronavirus on the economy made the recommendation, already approved by the President, Muhammadu Buhari (GCFR).
The committee is chaired by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed. Other members 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.
Speaking with State House correspondents on Wednesday after the Federal Executive Council meeting in Abuja, Ahmed expressed hope that the measures would help stabilize the economy.
She said 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.
She said “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. On how much it will affect the federally-funded upstream projects; it is about 25 per cent cut. The exact amount, we will work out when we get input from the ministries, departments and agencies.”
Join our twitter community :
