… as It Says Economy Will Contract by 3.4 %
Due to the adverse implications of the COVID-19 pandemic on the economy, Nigeria’s Budget plan is to be cut by the Federal Government , the second time running ,to assume a lower petroleum price of $20 per barrel ,even as it has projected that the economy will contract by 3.4 percent this year .
The development came to the fore through, the Finance Minister, Zainab Ahmed, during her contribution at a virtual session tagged ‘Citizens dialogue session on government fiscal policy decisions in response to the fall in oil prices and the COVID-19 pandemic’.
She said that the benchmark would again have to be revised down adding that Government is in the process of an amendment that is bringing down the revenue indicator to $20 per barrel.
The Minister stated that budget revision would need to be approved by lawmakers before being signed into law by the president adding that the country’s oil and gas projects will be delivered much later than originally planned” due to upstream budget cuts.
Director General of the Budget Office of the Federation ,Ben Akabueze in his contributions at the session, said oil revenues were expected to fall by more than 80%.
He said the government had revised its projections and expected the economy to contract by 3.4% this year compared with its previous expectation that it would grow by 2.9%.
He however said that Nigeria would speed up marginal field licensing and oil mining license renewals to try to raise revenues adding that debt servicing costs were expected to rise by 200 billion naira in 2020.