As recommended by the Ministry of Finance, the Federal Executive Council, FEC, has approved the 2020 budget and the Medium Term Expenditure Framework for 2020-2022.
The Minister of Finance, Mrs Zainab Ahmed, while briefing State House newsmen on Wednesday, said that the budget has new benchmarks which now includes $25 per oil barrel, and a target production rate of 1.94 million barrels per day and then an exchange rate of N360 to $1.
With a difference of about N71.5 billion when compared to the initial approved budget, the Minister said that the revised budget now amounts to N10.5 trillion,
Mrs Ahmed stated:
This is because, as we cut down the size of the budget,” she noted
We also have to bring in new expenditure previously not budgeted, to enable us adequately respond to the COVID-19 pandemic.
According to her, while the deficit from N5.365 trillion will be financed by both domestic and foreign borrowing, the Federal Government will fund the budget by N5.158 trillion.
The budget approval is coming in line with the approval of the Federal Government’s borrowing plan of N850 billion by the Senate and House of Representatives.
Mrs Ahmed also stated that the plan was to borrow from foreign sources for 2020, stating that these “are all concessionary loans from the IMF which has already been approved and has crystallised, from the World Bank, Islamic Development as well as Afro EXZIM bank.”
The borrowing, the multilateral loans drawdown coming from special accounts and coming from the privatisation will fund the fiscal deficit of N5.365 trillion that we have in the proposed amendment of the 2020 budget.
Speaking further, the Minister revealed an $80 million loan had been requested from the Islamic Development Bank on behalf of Ebonyi State government, for the construction of the Abakaliki ring road project, which would connect 13 LGAs in the state.
Similarly, the Federal Executive Council also approved N683 million for the purchase of 19 operational vehicles by the Nigeria Port Authority (NPA).
Also speaking with journalists, the Minister of Transportation, Rotimi Amaechi, revealed that the approval came because it “was the first time in four years that NPA is buying any vehicle.”