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Finance - Profiles - March 5, 2020

Coronavirus: Nigeria May Need to Review 2020 Budget


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Coronavirus: Nigeria May Need to Review 2020 Budget

The widespread of the Coronavirus threatens the Nigeria crude oil sector, thus making the need to review the nations budget a crucial one.

Accordingly, the federal government is considering the revision of its N10.59 trillion 2020 budget signed into law on December 17, 2019. The budget was predicated on the $57 per barrel and daily production output of 2.1 million barrels per day.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, says the coronavirus pandemic has adversely affected Nigeria budget, adding that a mid-term analysis of the 2020 budget will be carried out to reflect the reality of the situation.

The minister made this known to the State House correspondent at the end of the meeting of the Federal Executive Council, Which was chaired by the President, Major General Muhammadu Buhari (retd.), at the State House, Abuja, on Wednesday.

She revealed that when the budget was reached, there was a plan for a midterm review and should the review indicate a significant impact on the country’s revenue due to the coronavirus outbreak,  some budget adjustment will be required.

“I will want to inform that the crude production is now at 2 million barrels per day and on some days it has moved up to  2.1 million barrels per day, so that in itself will be a cushion. All the same, we are not taking any measures now until we have a reasonable period we make a review and then we may need to make an adjustment of the budget through working together with the National Assembly.”

The price of Nigeria’s crude oil was well above $60 per barrel when Buhari signed the N10.59tn budget into law in December last year. However, the price has taken a downward turn since January, deteriorating with the outbreak of coronavirus. The Nigeria budget has an oil benchmark of $57 per barrel, but As of Wednesday when the minister spoke, the price hovered around $53 per barrel due to the coronavirus, recording a loss of $4 off the benchmark.

But Ahmed noted that a rise in daily oil production above the budgeted 2 million barrels, could draw in some money to cover the loss.

She added, “I am glad to inform you that our oil production as of today is two million barrels per day and at times slightly higher like 2.1 million. That in its self will be a cushioning effect for us in the current oil price.”

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