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FEC amends 2020 budget, sets oil benchmark at $25/barrel due to COVID-19 pandemic

The Federal Executive Council (FEC), presided over by President Muhammadu Buhari, on Wednesday, May 14; in Abuja approved the amendment of the Medium Term Expenditure Framework of 2020 to 2022; as well as an amendment to the 2020 budget due to the COVID-19 pandemic.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, made this known at the end of the virtual session of the Federal Executive Council (FEC), held at the Council’s Chamber of the Presidential Villa, Abuja,

President Buhari had in December 2019 signed the 2020 appropriation bill of N10,594,362,364,830 into law.

The budget was increased from N10.33 trillion to N10.594billion by the National Assembly with Nigeria’s daily oil production rate at 2.18 million per barrel; but increased the Oil Benchmark Price to 57 dollars per barrel against the 55 dollars proposed by the Executive.

However, the minister announced that the FEC approved a revised budget of 10.523trillion; a difference of N71.5billion when compared to the approved budget of N10.594trillion.

Ahmed said the Council approved the reduction of oil benchmark price from the initial 57 to 25 dollars per barrel; crude oil production from 2.18million to 1.94million per day.

“The FEC has approved our recommendations and the approval has these key parameters.

“The crude oil price is approved at $25 per barrel, crude oil production is at 1.94 million barrels per day and then an exchange rate of N360 to $1.

“Therefore, the revised budget is now in the total sum of N10.523 trillion; a difference of just about N71.5 billion when compared to the approved budget.

“This is because, as we cut down the size of the budget; we also have to bring in new expenditure previously not budgeted, to enable us adequately respond to the COVID-19 pandemic,’’ she said.

The minister added that revenue to be realized from privatization would also be used in financing the projects.

She said: “The multilateral loans drawdown coming from special accounts and coming from the privatization will fund the fiscal deficit of N5.365 trillion that we have in the proposed amendment of the 2020 budget.’’

Ahmed also revealed that the federal government would on behalf of Ebonyi State Government obtained a loan of 80 million dollars from the Islamic development bank; for the construction of the Abakiliki ring road project.

While the federal government is the one borrowing from the bank; Ahmed said the federal government will be on-lending these loans to Ebonyi State government.

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