The leadership of the National Assembly has met some Ministers and Heads of agencies from the Executive arm of Government to brainstorm on the impact of Coronavirus pandemic on the Nigerian economy.
The meeting specifically touched on the planned review of the 2020 budget and Medium Term Expenditure Framework and Fiscal Strategy Paper passed late last year by the lawmakers.
President of the Senate, Ahmad Lawan, who presided over the meeting, said that an immediate review of the 2020 budget and Medium Term Expenditure Framework was imperative, particularly against the backdrop of the impact of the Coronavirus pandemic on global economy.
Importance of the meeting
The meeting, which lasted almost four hours, according to Lawan, was held to “discuss the proposed review of the 2020 budget and the Medium Term Expenditure Framework.”
“If we have to review the budget itself, we have to consider the MTEF/FSP. Even in sickness, we need government to provide services. The impact of COVID-19 is well known to all of us in terms of health and the economy.
“Here, we will be talking of revenues that we estimated to fund the budget 2020. And Because the oil price has gone so low due to the impact of COVID-19, the Minister of State should be able to tell us where we will be in the next six months or so.
“We should have concepts that can deliver fast and are sustainable. Anything that we do that can not provide succor and relief to our people will lead to catastrophe,” the Senate President stated.
Also, the Speaker of the House of Representatives, Femi Gbajabiamila said the meeting was very timely.
“Taking a cursory look at some of the papers(presentations), I think this meeting is actually very timely and very important because we live in very unusual time and it’s time we start thinking outside the box to see how we can stabilise our economy and the direction it’s going to take,” Gbajabiamila said.
The Minister of Finance, Zainab Ahmed explained that “prior to COVID-19 and Oil price decline, the Nigerian economy was already fragile and vulnerable.”
According to her, due to the a global economic downturn precipitated by the impact of the Coronavirus pandemic, international Oil prices plunged as low as $22 (USD) per barrel on the international market.
She stressed that ”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 Minister said that in view of Nigeria’s economic realities, the Crisis Management Committee constituted by President Muhammadu Buhari in response to the COVID-19 and Oil Price Decline Crisis expressed concern that “the decline in international oil prices or domestic production may be magnified if a severe outbreak of the pandemic occurs in Nigeria.”
2020 budget review
Accordingly, Ahmed proposed a review of the 2020 budget using a US$30 per barrel price benchmark as against US$57 initially passed in December by the National Assembly, to prepare for the worst case scenario, as well as insulate the Nigeria economy against any form of unexpected crisis.
She also told the leadership of the National Assembly 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 percent, based on the adverse economic outlook on sales of the Independent Power Projects (IPPs) and other assets.”
Similarly, Ahmed disclosed that the Nigerian 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.