By Adedapo Adesanya
The federal government has disclosed that it plans to review the country’s budget for the year as oil revenue have been affected by the widespread coronavirus since the beginning of this year.
Minister of Finance, Budget, and National Planning, Mrs Zainab Ahmed, said on Wednesday that government was going to kickstart a mid-term review of the budget in order to put the appropriate measures in place.
Speaking on the sidelines of the Federal Executive Council (FEC) meeting in Abuja yesterday, Mrs Ahmed said, “We are concerned about the current drop in oil price because it’s now below our budget.
“We will do a mid-term review, and if the impact is so much, we will need to do an adjustment in the budget, working together with the National Assembly.”
Earlier in the year, price of the Brent Crude, which Nigeria weighs its budget against, went up by over $13 of the benchmark set for the 2020 budget, $57 per barrel.
In February, prices were hit hard by spread of the coronavirus, which originated in China, and as a result, it went below $50 last week. But this week has seen improvements, though still trading below the benchmark.
Decisions by the Organisation of the Petroleum Exporting Countries could see a further reduction of Nigeria’s production quota drop in order to stabilise prices.
However, Mrs Ahmed noted that a rise in daily oil production above the budgeted two million barrels could level up some money to cover the loss.
“I am glad to inform you that our oil production as of today is two million barrels per day and at times slightly higher like 2.1 million.
“That in itself will be a cushioning effect for us in the current oil price,” she added.
As at the time of the report, the Brent Crude was trading up at $51.20 per barrel, while the US futures, the West Texas Intermediate (WTI), was also pointing north at $46.84 per barrel.
Dipo Olowookere