The federal government has approved a a reduction in the 2020 budget by N1.5 trillion.
The Coronavirus pandemic and the Saudi-Russia price war have combined to cut oil price to less than $30 per barrel. The situation is forcing Nigeria to adjust it’s 2020 budget considering that it heaavily relies on oil for 90 per cent of it’s revenue.
President Muhammadu Buhari had on 18 December 2019 signed the 2020 appropriation Bill of N10.59 trillion into law.
This is the first time in many years that the federal government budget would go back to the January to December life cycle.
Briefing State House correspondent, after the Wednesday Federal Executive Council (FEC) meeting, Minister of Finance Mrs. Zainab Ahmed said the government was working on a worst scenario oil benchmark of $30 per barrel at 1.8 million production capacity.
She said the President has also approved other far reaching measures to deal with the present economic realities occasioned by Covid19.
Some of the measures approved by the president according to Ahmed include a cut down on the size of the federally funded upstream projects by N457 billion, reduction of projected revenue from excise duty, cut down on capital expenditure by 20%, a reduction of recurrent expenditure by 25%, a ban on recruitment except for essential services and the review of social investment programme among others.
She however assured that the government was not considering downsizing of staff or a cut in the salaries of civil servants.