Faced with the stark reality of unexpected fall oil prices, the Federal Government has chopped off N318 billion from its 2020 budget and sent it to the National Assembly for approval.
By this proposal, which have legal backing when endorsed by the National Assembly, the government is reducing the budget estimate from N10.594 trillion to N10.276 trillion.
The coronavirus pandemic coupled with muscle-flexing between OPEC member Saudi Arabia and non-OPEC member, Russia, has forced down prices of the commodity.
The Federal Government had earlier reduced the oil bench mark from $57 per barrel to $30 per barrel, as the oil production volume was dropped from 2.17 million barrel to 1.70 million barrel.
The exchange rate was increased from N305 to N360 per dollar. It was learnt that capital projects across ministries, departments and agencies have been reduced by 20 per cent and pegged at N312.82 billion. Meanwhile, the leadership of the National Assembly, Minister of Finance, Zainab Ahmed, and the Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, had a close door meeting . Shortly after the meeting, the Senate President, Ahmad Lawan took to his Twitter handle stating what happened at the closed door meeting.
He said that the National Assembly leadership was presented with all the facts regarding the the current situation on Nigeria’s crude oil and the amendment being contemplated as regards the MTEF and 2020 budget. Lawan said, “At the heart of all these facts is the various intervention initiatives of the Federal Government to mitigate the impact of the Coronavirus pandemic on Nigeria.
Economic experts are already predicting gloomy year and beyond for Nigeria unless something drastically happens to trigger high prices of fuel. Nigeria earns about 90 per cent of forex exchange from.
The experts predict that if the prices of the commodity continue on their present trajectory, it would spell economic doom for Nigeria as the currency the Nigeria would heavily lose value and foreign investors would be reluctant to come into an environment of uncertainty.
