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Crash in oil price forces Nigerian govt to cut 2020 budget by N1.5tr
The Federal Government on Wednesday cut the 2020 Budget by N1.5 trillion.
President Muhammadu Buhari presented the 2020 budget of N10. 59 trillion to the National Assembly last year.
With this development, the budget has been cut down to N9.9trillion.
The federal government had also banned recruitment of workers into the Ministries, Departments and Agencies (MDAs).
The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed these while briefing State House correspondents at the end of the Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari at the Council Chamber of the Presidential Villa, Abuja.
She also announced a 20 percent cut on the budget capital expenditure and 25 percent reduction in recurrent expenditure.
Ahmed said: “We should cut down on the size of the federally funded upstream projects of the Petroleum sector. The reason being we want to be able to receive more revenue by less reduction from NNPC.
“The reduction of the crude oil price from $57 per barrel that we budget to $30 means that we are going to get so much less revenue almost 45 percent loss as we planned.
“And because of that we have to amend a number of projections in the budget as well as in the MTEF to reflect our current reality.
“We also need to adjust Customs revenue which has been budgeted at N1.5 trillion. But we are adjusting it downwards because we anticipate that trade volumes will reduce and once trade volume is reduced, Customs revenue will be significantly impacted as a result.
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“On the expenditure size, the President has approved that we should cut down the capital expenditure budgeted by 20 percent across Ministries, Departments and Agencies and also on 25 percent cut on all government-owned enterprises.
“This includes the ones that are in the national budget, the ten top ones that we included in the 2020 budget but also the ones we didn’t include in the 2020 budget.
“The administration resolved to stop recruitment except for essential services such as security and health services and to also comply with the civil service retirement regulations.”
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