Nigeria: Coronavirus - Govt Cuts N1.5trn From 2020 Budget

(file photo).
19 March 2020

The federal government yesterday announced the plan to reduce N1.5trn from the N10.59trn 2020 Appropriation Act.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, who addressed journalists after the federal cabinet meeting yesterday, said the cut from capital expenditure stood at 20 %; while recurrent expenditure would incur 25 %.

On March 5, the minister hinted at the possibility of reducing the 2020 budget due to coronavirus.

The National Assembly had passed the budget at $57 per barrel oil benchmark.

The global crude oil prices are now oscillating between 29 and 30 dollars.

The minister, when asked yesterday about how much would be cut from the budget, said: "We've written every ministry and given them guidelines on how these adjustments will be made to enable us have detailed inputs from the ministries.

"But I can just say that the bulk cut is about N1.5trn, the reduction in the size of the budget. And this includes N457bn from PMS under-recovery."

She said the government would continue to pay salaries and would not sack workers, but place embargo on the recruitment exercise and replacement.

"On recruitment, there is already an instruction to stop recruitment. What the agencies have been doing is replacement but even that is being suspended. 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. So, we are not looking at downsizing in anyway. We are maintaining our workforce as it is. But we are just stopping the increase in the size of the nominal roll."

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