The Federal Government on Wednesday proposed a review of the 2020 budget using a US$30 per barrel price benchmark as against $57 initially passed by the National Assembly.
Speaking at a meeting with the leadership of the National Assembly, Finance Minister, Zainab Ahmed, said the review was to prepare for the worst case scenario, as well as insulate the Nigerian economy against any form of unexpected crisis.
The meeting, which lasted almost four hours, according to Senate President Ahmad Lawan, was summoned to “discuss the proposed review of the 2020 budget and the Medium Term Expenditure Framework.”
The minister said due to the global economic downturn precipitated by the impact of the coronavirus pandemic, international oil prices plunged as low as $22 per barrel on the international market.
She said the impact of the pandemic which resulted in international crisis created a disruption in travel and trade, and put “increasing pressure on the naira and foreign reserves as the crude oil sales receipts decline and the country’s micro-economic outlook worsens.”
She also said budgeted revenues for the Nigeria Customs Service had been reduced from N1.5 trillion to N943 billion “due to anticipated reduction in trade volumes; and privatization proceeds to be cut by 50 percent, based on the adverse economic outlook on sales of the Independent Power Projects (IPPs) and other assets.”
She said the Federal Government had undertaken cuts to revenue-related expenditures for the Nigerian National Petroleum Corporation for several projects included in the 2020 Appropriation Act.
“The Federal Government is working on Fiscal Stimulus Measures to provide fiscal relief for Taxpayers and key economic sectors; incentivize employers to retain and recruit staff during the economic downturn; stimulate investment in critical infrastructure; review non-essential tax waivers to optimize revenues; and compliment monetary and trade interventions to respond to the crisis,” the minister said.
She added that the government had made provision for health sector interventions by introducing import duty waivers for essential input for pharmaceutical firms; tax waivers on new equipment; and deferment of tax to increase production.
Meanwhile, the minister said the government was releasing a sum of N6.5 billion to the National Centre for Disease Control (NCDC) as intervention to fight the spread of coronavirus in Nigeria.
She said the money would be released in two tranches – N1.5 billion and N5 billion.
Ahmed also said Nigeria had received a grant of US$18.2 million from Japan for strengthening seven NCDC centres across the country.
She said that the Lagos State Government would receive financial support from the Federal Government to the tune of N10bn to combat coronavirus spread in the state.
According to the minister, the sum of N1bn would be released by government to Pharmaceutical firms in the country.
Earlier, the Senate president warned that “anything that we do that cannot provide succour and relief to our people will lead to catastrophe.”