The leadership of the National Assembly on Wednesday met with the Governor of the Central Bank of Nigeria, Godwin Emefiele, and the Finance Minister, Zainab Ahmed, over the planned review of the 2020 budget.
Also present at the meeting were the Minister of State for Budget and National Planning, Clem Agba and Minister of State for Petroleum Resources, Timipre Sylva.
Others were the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, and Senior Special Assistant to the President on National Assembly Matters, Babajide Omoworare.
The meeting which lasted for over four hours in Abuja was also aimed at tackling the economic impact of the coronavirus on the nation’s economy and the recent oil price crash.
The participants also discussed the need to review the Medium Term Expenditure Framework and Fiscal Strategy Paper passed late last year by the National Assembly.
This comes about a week after the Senate resolved that the review of the 2020 budget was inevitable.
The resolution was sequel to the receipt and deliberation of the interim report of the Senate joint committee on finance, appropriations, national planning and petroleum resources (upstream).
In her presentation, Ms Ahmed said the Nigerian economy was already fragile and vulnerable prior to COVID-19 and oil price decline.
She said the impact of the pandemic which resulted in international crisis created a disruption in travel and trade, and put “increasing pressure on the naira and foreign reserves as the crude oil sales receipts decline and the country’s micro-economic outlook worsens.”
The decline in international oil prices or domestic production may be magnified if a severe outbreak of the pandemic occurs in Nigeria, she added.
The official proposed a review of the 2020 budget using a $30 per barrel price benchmark to prepare for the worst case scenario, as well as insulating the Nigeria economy against any form of unexpected crisis.
She also informed that budgeted revenues for the Nigeria Customs Service had been reduced from N1.5 trillion to N943 billion “due to anticipated reduction in trade volumes; and privatisation proceeds to be cut by 50 per cent, based on the adverse economic outlook on sales of the Independent Power Projects (IPPs) and other assets.”
Cuts in revenue
Ms Ahmed disclosed that the federal government has undertaken cuts to revenue-related expenditures for the Nigerian National Petroleum Corporation (NNPC) for several projects included in the 2020 Appropriation Act passed by the National Assembly in December, 2019.
“The federal government is working on Fiscal Stimulus Measures to provide fiscal relief for taxpayers and key economic sectors; incentivise employers to retain and recruit staff during the economic downturn; stimulate investment in critical infrastructure; review non-essential tax waivers to optimise revenues; and compliment monetary and trade interventions to respond to the crisis,” she said.
She added that the federal government had made provision for health sector interventions by introducing import duty waivers for essential input for pharmaceutical firms; tax waivers on new equipment; and deferment of tax to increase production.
The minister disclosed that the federal government would be releasing N6.5 billion in two tranches (N1.5 billion and N5 billion) to the National Centre for Disease Control (NCDC) as intervention to assist in the fight against the spread of the COVID-19 disease in Nigeria.
The Lagos State Government would also receive financial support from the federal government to the tune of N10 billion to combat coronavirus spread in the state, she said.
She also informed the lawmakers that Nigeria had received a grant of $18.2 million from Japan for strengthening seven NCDC centres across the country. “And N1 billion would be released by government to pharmaceutical firms in the country,” she said.
On his part, Mr Emefiele said, “while we would expect to see a decline in our expected growth projection for 2020 relative to 2019, the exact impact will be dependent on how well the coronavirus is contained over the next few month, and how long low oil prices persist.”
On his part, the Senate President, Ahmad Lawan, stressed the need for the government to provide services even in sickness.
“We should have concepts that can deliver fast and are sustainable,” he explained. “Anything that we do that cannot provide succour and relief to our people will lead to catastrophe.”
The Speaker of the House of Representatives, Femi Gbajabiamila, described the meeting as timely.
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