Nigeria Further Adjusts 2020 Budget Oil Benchmark to $25
…Adjusts national budget to $10.52trln
Nigeria has adjusted its national budget key parameter, crude oil benchmark, to $25 from $30 per barrel.
It is the second time the country was forced to alter crude oil benchmark due to pressure from the fallen rates at the international market, owed the Covid19.
The original crude oil benchmark was $57, but the Nigerian government, in the wake of the COVID-19, opted for $30 as crude oil prices collapsed.
Rising from its federal executive meeting last Wednesday, the Muhammadu Buhari administration also announced a further adjustment of the 2020 budget from the original N10.59 trillion to N10.52 trillion. The budget deficit is in excess of N5.3 trillion.
The new figures were captured in the revised 2020 Medium Term Expenditure Framework submitted to the council by the minister of finance, budget, national planning, Mrs Zainab Ahmed. She had explained that daily crude oil production was now 1.94 million barrels per day, while the naira-dollar exchange rate was put at N360/$1.
“The revised budget is now in the total sum of N10.52 trillion, a difference of just about N71.5 million when compared to the approved budget. This is because, as we cut the size of the budget, we also have to bring in new expenditure previously not budgeted, to enable us to adequately respond to the COVID-19 pandemic,” she said.
According to the minister, the dwindling finances owing to the crude oil crash means that the budget comes with a huge deficit to be funded through foreign and domestic borrowings.
“The federal government in this budget will have direct revenue of funding the budget of N5.158 trillion. The deficit to this budget is N5.365 trillion and this will be financed by both domestic as well as foreign borrowings,” according to her.
She explained that the foreign borrowings Nigeria is doing for 2020 are all concessionary loans from the International Monetary Fund (IMF), the World Bank, the Islamic Development Bank as well as Afro-EXIM Bank. “There will also be some drawdown of previously committed loans for major ongoing projects that we will be drawing from both existing facilities as well as some special accounts with the approval of Mr President and the National Assembly.”
Chibisi Ohakah, Abuja