FG approves cut Of 2020 Budget to N10.523trn
The federal government yesterday approved a revised 2020 budget now pegged at N10.523 trillion. Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed disclosed this to State House correspondents after the council’s first ever virtual Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari.
Ahmed noted that council also approved crude oil price at $25 per barrel, crude oil production at 1.94 million barrels per day and an exchange rate of N360 to $1.
She said her ministry submitted a memo to council seeking for approval of the amendments of the Medium Term Expenditure Framework for 2020-2022 as well as amendment to the 2020 budget. Noting that the council approved the recommendations, the minister said,
“The crude oil price is approved at $25 per barrel, crude oil production is at 1.94 million barrels per day and then an exchange rate of N360 to $1. “The revised budget is now in the total sum of N10.523 trillion, a difference of just about N71.5 billion when compared to the approved budget.
This is because as we cut down the size of the budget, we also have to bring in new expenditures previously not budgeted to enable us respond adequately to the COVID-19 pandemic”.
The minister further explained that the federal government will have direct revenue of funding the budget to the tune of N5.158 billion. Ahmed added that the deficit to the budget is N5.365 trillion, saying this would be financed by both domestic as well as foreign borrowing. She stated:
“The foreign borrowing we are doing for 2020 are all concessionary loans from the IMF which has already been approved and has crystallised from the World Bank, Islamic Development Bank as well as Afro EXZIM Bank.
“There will also be some drawdown of previously committed loans for major ongoing projects that we will be drawing from both exiting facilities as well as some special accounts with the approval of Mr President and the National Assembly, as well as revenue that we are expecting to realize from privatisation.
“So the borrowing, the multilateral loans draw down coming from special accounts and coming from the privatization will fund the fiscal deficit of N5.365 trillion that we have in the proposed amendment of the 2020 budget.” The minister also disclosed that the federal government requested on behalf of Ebonyi State government for a loan of $80 million from the Islamic Development Bank, for the construction of Abakilike ring road project.