The Nigerian government has amended the 2020 Appropriation Act to reflect the current economic realities as a result of the impact of the Coronavirus pandemic on the global economy.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, said on Monday in Abuja that with the coronavirus pandemic triggering a global economic crisis, the fiscal assumptions behind the budget are no longer realistic.
Since the outbreak of the coronavirus, growth in most economies have gone into reverse, with the worst impact felt by commodities-dependent economies like Nigeria, following unprecedented decline in crude oil prices.
When President Muhammadu Buhari signed 2020 Appropriation Act on December 17, 2019, the N10.59 trillion Budget consisted of N4.84 trillion recurrent expenditure, N2.46 trillion capital expenditure, N2.72 trillion for debt servicing, N2.28 trillion for fiscal deficit and deficit-to-Gross Domestic Product (GDP) ratio of 1.52 per cent.
The Appropriation Act was also predicated on projections of crude oil production of 2.18 million barrels per day, oil benchmark of $57, exchange rate of N305 to the dollar, gross domestic product (GDP) growth rate of 2.93 per cent, inflation rate of 10.81 per cent and the statutory transfer of N556.7 billion.
However, following the impact of the pandemic, the finance minister said Brent crude oil price crashed to an all-time low of $19.125 per barrel as at last Friday, April 3, while oil production in 2020 year-to-date has dropped significantly below 2.0 million barrels per day.
"Because the 2020 Appropriation Act was based on certain fiscal assumptions, we have been compelled to revisit them given the emerging economic realities," Mrs Ahmed said.
She said with projected oil revenues significantly affected, government has been compelled to revise the benchmark oil price for 2020 to $30 per barrel and oil production to 1.7 million barrels per day.
Similarly, she said the government has also resolved to adjust downwards its non-oil revenue projections, including various tax and customs receipts as well as proceeds of the privatisation exercises.
"In this regard, the Budget Office is currently working on a revised 2020 - 2022 Medium-Term Expenditure Framework / Fiscal Strategy Paper (MTEF/FSP) as well as an Amendment to the 2020 Appropriation Act," she said.
The proposed amended budget, the minister explained, would provide for the COVID-19 Crisis Intervention Fund and other adjustments required due to the decline in international crude oil prices.
She said the government has also commenced engagements with the leadership and key committees of the National Assembly on the plans, such that once the 2020 amendment budget was completed, the government would expeditiously seek necessary presidential and legislative approvals.