Bolaji Ogundele, Abuja
The Federal Executive Council (FEC) approved a revision of the 2020 Budget from N10.594 trillion to N10.523 trillion, reflecting a downward revision of N71.5 billion.
The Minister of Finance, Budget and National Planning, Ms. Zainab Ahmed, who said this while informing the correspondents of the State House after the virtual meeting of the FEC at the State House yesterday, also said that an amendment to the Medium Expenditure Framework Deadline (MTEF) for 2020-2022 has been approved.
President Muhammadu Buhari in December signed the appropriation law of N10.594 trillion.
The minister also explained that the FEC also approved the recommendations with key parameters, including the price of oil at $ 25 per barrel, oil production at 1.94 million barrels per day and an exchange rate of N360 to US $ 1.
She said: “This is because, in reducing the size of the budget, we also need to bring in new, previously un budgeted expenses, to allow us to respond adequately to the COVID-19 pandemic.
“The federal government in this budget will have direct revenue when financing the budget of N5,158 billion. “The deficit for this budget is N5.365 trillion and it will be financed by both domestic and foreign loans.
“The foreign loans we are making for 2020 are all concessionary loans from the IMF, which have already been approved and crystallized, from the World Bank, the Islamic Development Bank and the Afri- EXIM bank.
“There will also be a survey of previously committed loans for the main ongoing projects that we will extract from the existing facilities, as well as some special accounts with the approval of the President and the National Assembly. And also the revenue that we hope to obtain from privatization.
"Therefore, loans and multilateral loans drawn from special accounts and from privatization will finance the fiscal deficit of N5.365 trillion that we have in the proposed amendment to the 2020 budget."
She also said that the council approved the purchase of three locally manufactured boats for the Nigeria Customs Service for their surveillance and anti-corruption activities in maritime waters.
Ahmed said there was an effort to sponsor products made in Nigeria because of the Coronavirus pandemic and also boost the economy.
His words: “In prioritizing products made in Nigeria, as you know, the President (Muhammadu Buhari) created an economic stimulus committee chaired by the Vice President (Prof. Yemi Osibajo). The committee's job is to develop a 12-month economic stimulus plan and we are in the final phase of this work.
“We prioritize spending on this plan to use and consume manufactured in Nigeria. For example, some of the public works projects that will employ many of our young people must be done strictly with our raw materials, so that we do not have to import bitumen, for example, to build our roads.
“Some of the FEC memos that were given today are on the council waiting in line for a few months. The transport one is not new, it did not arrive today and the council thought it should go because it has been there for a long time.
"But we have obtained the approval of Mr. President that possible expenditures must be made in Nigeria on goods and products produced in Nigeria, in order to save our exchange rate and also help to grow the economy."
In addition, the minister said that the $ 80 million loan from the Islamic Development Bank on behalf of the Ebonyi state government was approved by the FEC
The finance minister said the money would be used to finance the construction of the Abakiliki ring road project.
While the Federal Government is the only one that borrows from the bank, the Federal Government does not lend that loan to the Ebonyi State government.
“We did our debt sustainability analysis that proves that the state of Ebonyi has the capacity to repay this loan, which is provided on the basis of libel plus and also in the long term for payment.
”This Ebonyi ring road connects 13 local government areas in the state and neighboring Republic of Cameroon. It is an important road that will provide access to citizens of the state, farmers, markets and improve economic activities in the state. And neighboring states will also benefit from this project. "
Also speaking at the briefing, the Minister of Agriculture and Rural Development, Alhaji Sabo Nanono, said that the FEC approved a loan of US $ 1.2 billion to finance the mechanization of agriculture in the country. .
He said the planned mechanization of agriculture will cover 632 areas of local government.
Nanono added: “Today, we present a joint memorandum with the Federal Ministry of Finance, in which we requested the approval of a loan of around 950 million euros, probably translated into US $ 1.2 billion.
”This loan is for agricultural mechanization purposes in this country – which will cover about 632 areas of the local government and another 140 processing plants.
"This will be a major revolution in the agricultural sector, which we have never seen before."