By Adedapo Adesanya
The federal government has reducing the country’s 2020 budget by N1.5 trillion from the N10.59 trillion initially signed by President Muhammadu Buhari last December due to recent economic developments.
Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, who made the announcement yesterday, stated that government will also reduce capital budget allocation by 20 percent across the ministries, departments and agencies (MDAs) while there will be a 25 percent cut in both the recurrent and capital budgets of government enterprises.
She added that the budget reduction guidelines have been sent to every ministry.
“The ones that we included in the 2020 Budget, and also the ones that we didn’t include in the 2020 budget. 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 inputs from the ministries.
“But I can just say that the bulk cut is above N1.5 trillion – the reduction in the size of the budget, and this includes N457 billion from PMS under-recovery.
“On how much it affects the federally funded upstream projects, it is about 25 percent cut. The exact amount we will work out when we get inputs from the ministries, departments and agencies,” she said.
The Minister further said that the budget cut will affect upstream projects with 25 percent cut, adding that the exact figure in monetary value would be worked out when inputs are received from the MDAs.
“On the expenditure side, the president has approved that we should cut down the capital expenditure budgeted by 20 percent across ministries, departments and agencies and also a 25 percent cut of all government-owned enterprises and these include the ones that are in the national budget,” the Minister said.
The federal government also modulated petrol pricing, directing the Nigerian National Petroleum Corporation (NNPC) and the Petroleum Products Pricing and Regulatory Agency (PPPRA) to set prices in accordance with prevailing market dynamics and further oil market development.
As a result, the Minister of State for Petroleum Resources, Mr Timipre Sylva, announced that petrol would now be sold at N125 per litre from Thursday, N20 below the N145/L that Nigerians often buy at fuelling stations.
Backed up by the Group Managing Director of the NNPC, Mr Mele Kyari, in a statement issued on Wednesday night, in compliance government’s directive, its Ex-Coastal price for PMS has been reviewed downwards from N117.6/litre to N99.44/litre while Ex-Depot price is reduced from N133.28/litre to N113.28/litre.
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 oil price war between Russia and Saudi Arabia.
