2020 Budget Suffers, $57 Crude Oil Price Impossible, As Buhari Sends Out Committee To Make Further Consultations With More Nigerians

An Interim report was on Friday, submitted to President Muhammadu Buhari, by the Committee set up to assess the impact of the coronavirus outbreak on the 2020 budget.

The Committee is chaired by the Minister of Finance, Budget and National Planning, Zainab Ahmed.

Other members of the Committee are the Minister of State, Petroleum Resources, Timipre Sylva; Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele; and the Group Managing Director, GMD, of the Nigerian National Petroleum Corporation, Mele Kyari.
Buhari appointed the Committee on Monday.

Ahmed disclosed to State House  Correspondents, on Friday, that after meeting with Buhari, he again directed the Panel to make further consultations with a wider segment of Nigerians, before coming up with recommendations on what actions to take.

She stated that they briefed Buhari on the findings so far, including “looking at ways to stabilise government revenues.”

Ahmed, who gave no figures, added: “We will be concluding the consultations next week, by which time we will release figures on specific approvals.”

It was however, learnt that the Federal Government may reduce the budget by over N1 trillion, as part of its immediate response to crashing oil revenues, in the wake of the outbreak of Covid-19.

The 2020 budget of N10.59 trillion, came under implementation challenges after its $57 crude oil benchmark became unsustainable, due to a fall in crude price to around $31, earlier in the week.

It later rose to $35.77, on Wednesday, as Experts warned that it would crash further again, amid the volatility in the market caused by the coronavirus.

Investigations showed that the Committee, after looking at the figures between Monday and Tuesday, returned to the State House, on Tuesday night, to see Buhari, to report immediate findings.

Those who were sighted at the Villa, on the return visit on Tuesday, included Ahmed and Emefiele.

“From what we gathered, the Panel holds the position that the current budget size of N10.59 trillion, is no longer sustainable.

“They are looking at a reduction anywhere between N1 trillion and above, which will leave the aggregate size at about N9 trillion”, an Expert said.

However, it was gathered that a final decision had not been reached on what might be the new oil benchmark, because of the frequent fluctuations in the barrel price.

The source added: “The Committee is looking at arriving at an appropriate figure which is implementable, without having to make a rush for another adjustment.

“The crude price has been falling and rising. At a point, some price watchers reported $32, $31, and $36. By Wednesday, it dropped to $35.77. Today (Friday), we heard it was $34.50 again.

“So, what is causing the delay is to see whether the price will be stable at a range for a while, and a recommendation can be made on the realistic benchmark.

“But, certainly, $57 is out of the way.”

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