Emmanuel Akosile | ConsumerConnect

In view of the realities that the implementation of the Federal Budget 2020 may have been negatively impacted by the recent sharp drop in crude oil price amid the outbreak of COVID-19 disease distorting several economies worldwide, the Federal Government has announced plans to cut down N1.5trillion from the N10.59trillion Budget 2020 President Muhammadu Buhari signed into law in December 2019.

ConsumerConnect gathered that Mrs. Zainab Ahmed, Honourable Minister for Finance, Budget and National Planning, disclosed this when briefing journalists after the Federal Executive Council (FEC) meeting Wednesday in Abuja, FCT.

Mrs. Ahmed said the cut from capital expenditure stood at 20% while recurrent expenditure would incur 25% respectively.

It is recalled that the minister March 5 had hinted at the possibility of seeking downward review of the Federal Budget 2020 through the National Assembly (NASS) because of the current drop in the price of crude oil due to the Coronavirus pandemic.

Originally in 2019, NASS had passed the budget at $57 per barrel Oil Benchmark Price, but the global crude oil prices reportedly are now fluctuating between $25 and $30 per barrel.

The Federal Government has said N285billion had been released out of N2.45trillion budgeted for Capital Expenditure in the Federal Budget 2020 targeted at financing prioritised and critical infrastructure agencies.

The government added that about $220million had been also released as of penultimate Tuesday as counterpart funding for railway projects.

President Buhari later constituted a five-man presidential review committee on the impact of COVID-19 on the nation’s economy, led by the Minister for Finance, Budget and National Planning.

“What we have done is that we have written to every ministry and given them guidelines on how these adjustments will be made to enable us have detailed inputs from the ministries.

“But I can just say that the bulk cut is about N1.5 trillion, the reduction in the size of the budget. And this includes N457 billion from PMS under-recovery,” Ahmed said.

She stated that other measures approved by the FEC to cushion the effects of the Coronavirus pandemic on the nation’s economy include the introduction of PMS price modulation mechanism, the cutting down on the size of the federally funded upstream projects of the petroleum sector, and the reduction of the crude oil price from the $57 per barrel budgeted to $30.

According to her, these measures also included the amendment of budget projections so that the Medium Term Expenditure Framework reflects the current realities, the cutting down of expenditures, and the enhancement of production at the minimum 2.18 million barrels per day (bpd).

Others are the adjustment of customs revenue, the review of the modalities for the implementation of the social investment programme, and the non-essential tax waivers to realise more revenue.