FG Reduces Budget by N1.5trn, Removes Subsidy

• FG Reduces Budget by N1.5trn, Removes Subsidy

The Federal Government on Wednesday reduced the nation’s budget for the year by N1.5 trillion as part of measures to curtail the effect of the coronavirus on the economy.

Without giving many details, the minister of finance said the N1.5 trillion would include the N457 billion appropriated for Premium Motor Spirit (PMS) under-recovery this year.

The panel constituted by the government to assess the effect of the coronavirus on the economy made the recommendation, already approved by President Muhammadu Buhari.

The committee chaired by Mrs Zainab Ahmed, the Minister of Finance, the Minister of State, Petroleum Resources, Mr Timipre Sylva; Governor of the Central Bank of Nigeria, Mr Godwin Emefiele; and the Group Managing Director of the Nigerian National Petroleum Corporation, Mr Mele Kyari, said the budget would be reduced by more than N1 trillion to support the economy while the crude oil benchmark would be lower from the initial $57 per barrel to $30 per barrel.

Ahmed said the measures would help curtail the impact of the coronavirus outbreak on the nation’s economy through job sustainability, price stability and business growth.

Speaking with State House Correspondences, the minister said, “What we have done is that we have written every ministry and given them guidelines on how these adjustments will be made to enable us to have detailed input from the ministries.

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

“On how much it will affect the federally-funded upstream projects; it is about 25 per cent cut. The exact amount, we will work out when we get input from the ministries, departments and agencies.”

Meanwhile, the Central Bank of Nigeria on Wednesday also announced a N1.1 trillion intervention fund to support both the manufacturing and health sector. This was after 6 measures to support and sustain small and medium enterprises were announced on Monday.

These measures seem to have been embraced by investors as the Nigerian Stock Exchange closed positive on Wednesday for the first time in eight days despite current global happenings.