Coronavirus: FG reportedly proposes to slash 2020 budget by N1.5trn

Coronavirus: FG reportedly proposes to slash 2020 budget by N1.5trn

- The minister of finance, budget and national planning, Zainab Ahmed, said the federal government is proposing to cut the 2020 budget size by N1.5 trillion

- Ms Ahmed also said the federal government will suspend the planned civil service recruitment

- The development is reportedly as a result of the slash in the oil price and the devastating impact of coronavirus on the economy

The federal government is proposing to cut the 2020 budget size by N1.5 trillion from N10.59 trillion to N9.09 trillion.

The Cable reports that Zainab Ahmed, the minister of finance, budget and national planning, announced the proposed cuts on Wednesday, March 8.

Legit.ng gathers that the proposal is subject to approval by the National Assembly.

Coronavirus: FG reportedly proposes to slash 2020 budget by N1.5trn

FG reportedly proposes to slash 2020 budget by N1.5trn
Source: UGC

“From the expenditure side, the president has approved that we should cut down the capital expenditure budgeted by 20% across ministries, departments and agencies,” the News Agency of Nigeria (NAN) quoted her to have said.

“Also, a 25% cut of all government-owned enterprises and these include the ones that are in the national budget, the 10 top ones we included in the 2020 budget but also those we did not include in the 2020 budget.

“So, all of these would have their recurrent expenditure and capital expenditure cut down by 25%.

“By these measures, we expect that the operating surpluses that would accrue to the federation will increase because when their operational expenditure reduces the operating surpluses that they remit to the treasury will also increase significantly.”

She said the ministry of budget and national planning has issued guidelines to other ministries on how the adjustments would be made.

“I can just say that the bulk cut is about N1.5 trillion, the reduction in the size of the budget. And this includes N457 billion from PMS under-recovery,” she explained.

The minister said the planned recruitment into the country's civil service would be suspended except for essential services such as security and health services.

She said the Federal Executive Council also agreed to restore and compliant by the civil service retirement regulations, while the modalities for the implementation of the social investment programme would also be reviewed.

Ahmed also disclosed that the council agreed to review the non-essential tax rebate currently being implemented to cut down on tax expenditure so as to generate more revenue.

“On recruitment, there is already an instruction to stop recruitment. What the agencies have been doing is replacement but even that is being suspended,” she said.

“When things improve we will go back to the issue of recruitment but for now, our wage bill is already very high.

“The president has directed that salaries and pensions must be paid unfailingly. We are maintaining our workforce as it is but we are just stopping the increase in the size of the nominal roll.”

According to the minister, the budget revisions would be based on a worst-case scenario of $30 per barrel at 2.18 million barrels per day.

President Muhammadu Buhari had earlier constituted a committee to examine the impact of the coronavirus outbreak on the economy and how to fund the 2020 budget after oil price fell below the budget benchmark.

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Earlier, Legit.ng reported that President Buhari approved the reduction in the pump price of premium motor spirit from N145 per litre to about N125.

The state minister for petroleum resources, Timipre Sylva, confirmed the development in a statement released in Abuja.

Sylva attributed the reduction in price to the decline in the prices of crude oil.

The Ministry of Petroleum has also released an update that the new price of petrol following the slash in the prices of crude oil will be N125.

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