Connect with us
nairametrics

Business News

FG to reduce N1.5 trillion from 2020 budget due to coronavirus

Mrs. Zainab Ahmed disclosed that the Federal Government has plans to reduce N1.5trn from the N10.59trn 2020 Appropriation Act.

Published

on

FG seeking approval from National Assembly for $1.2 billion agric loan, Capital market to get more tax incentives - FG , FEC reviews Ajaokuta-Kaduna-Kano gas project contract, approves $2.571 billion, FG to reduce N1.5 trillion from 2020 budget due to coronavirus

The Federal Government has disclosed plans to reduce the 2020 budget by as much as  N1.5 trillion.

The disclosure was made by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, while briefing State House correspondents at the end of the Federal Executive Council, (FEC) meeting presided over by President Muhammadu Buhari at the Council Chamber, Presidential Villa, Abuja.

COVID-19: How the tables turned on Europe, New Tech Opportunities amid COVID-19 Crisis, FG to reduce N1.5 trillion from 2020 budget due to coronavirus

Ahmed said that there will be a cut of 20% from the capital expenditure of the 2020 budget while recurrent expenditure will be reduced by as much as 25%. Recall that She had earlier in the month hinted at the possibility of reducing the 2020 budget due to the coronavirus outbreak.

(READ MORE: COVID-19: President Buhari sets up committee to look at impact on 2020 budget)

GTBank 728 x 90

According to Ahmed, Buhari had approved other far-reaching measures in the face of the current economic realities occasioned by COVID-19. One of those measures is the cut in crude oil benchmark from $57 per barrel to $30 per barrel in the revised budget. The global crude oil prices are now less than $30 per barrel.

Ahmed’s words: “We should cut down on the size of the federally funded upstream projects of the Petroleum sector. The reason being that we want to be able to receive more revenue by less reduction from NNPC. 

“The reduction of the crude oil price from $57 per barrel to $30 means that we are going to get so much less revenue, almost 45 percent loss as we planned. And because of that, we have to amend a number of projections in the budget as well as in the MTEF to reflect our current reality. 

Coronation ads

“We also need to adjust Customs revenue which has been budgeted at N1. 5 trillion but we are adjusting it downwards because we anticipate that trade volumes will reduce and once trade volume is reduced, Customs revenue will be significantly impacted as a result.”

READ MORE: Importing petroleum products must stop, NNPC has over $20bn assets – Kyari 

Speaking further, Ahmed said the government would continue to pay salaries and would not sack workers, but would not be recruiting or increasing its workforce size for the time being.  

On concerns of the economy slipping back into recession, Ahmed said the budget cut would result in about 40 to 45% reduction and also it will affect states because it means FAAC will be significantly reduced.

“FAAC is just a pool of funds and we share what is realized, so it will affect the states as well. So we are expecting the states to take similar measures to amend the plans that we have made and bring them down to current realities.

Jaiz bank ads

“On plans to scale back VAT and excise duty, I am not making any commitment on that right now because these are provisions in the law in the Finance Act and as you know, we will, even in the amendment to the MTEF and the budget, have to engage with the National Assembly. The fiscal authorities are working with the fiscal authority team and we will get the President’s approval before we come up with what we will announce to the public.” Ahmed added.

Stanbic IBTC

Chidinma holds a degree in Mass communication from Caleb University Lagos and a Masters in view in Public Relations. She strongly believes in self development which has made her volunteer with an NGO on girl child development. She loves writing, reading and travelling. You may contact her via - [email protected]

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Appointments

Unilever announces the appointment of Jaime Aguilera as Non-Executive Director

Unilever Nigeria Plc has announced the appointment of Mr. Jaime Aguilera as a Non-Executive Director.

Published

on

The Board of Directors of Unilever Nigeria Plc has announced the appointment of Mr. Jaime Aguilera as a Non-Executive Director.

This information was disclosed by Unilever in a notification issued and signed by the Company’s Secretary Abidemi Ademola.

According to the information contained in the notification, the appointment of Mr. Aguilera as a Non-Executive will take full effect from 1 January 2021.

However, the Board of Nestle disclosed that Mr Aguilera is a well-rounded business professional, with broad operational expertise while working for top FMCG companies.

What you should know

GTBank 728 x 90

Aguilera in 2009 joined Unilever Spain as EVP & Chairman. He was appointed as Executive Vice President Unilever Eastern Europe in September 2016. He has since then moved to his current role as Unilever Executive Vice President Africa, leading the Unilever business in Africa.

Prior to joining Unilever, he has been in Coca-Cola, Nestlé and Procter & Gamble. His experience spans Europe, the Americas and Asia.

Coronation ads
Continue Reading

Energy

FG delivers 100 KWP Solar Mini-Grid to serve off-grid community in Ogun State

The REA has delivered 100kWp Solar Hybrid Mini-Grid designed to adequately serve off-grid community in Ogun state.

Published

on

In a bid to provide remote communities with clean and affordable energy, the Rural Electrification Agency under the aegis of the Federal Ministry of Power has delivered 100kWp Solar Hybrid Mini-Grid designed to adequately serve off-grid community in Ogun state.

This was disclosed by the agency in a tweet which was issued via its official Twitter handle today.

The Rural Electrification Agency disclosed that the intervention of the Solar Hybrid Mini-Grid to the community was successfully delivered under Rural Electrification Fund (REF).

The Executive Director, REF, Sanusi Ohiare encouraged the indigenes to optimise the impact of this intervention while using this access to clean, safe and reliable energy productively.

GTBank 728 x 90

However, the Managing Director of Rural Electrification Agency, Mr. Ahmad Salihjo, while sharing his remarks, explained to the community members that he strongly believes that the quality of lives will be improved and children will have better learning experiences with access to reliable electricity in Olooji community.

Mr. Ahmad commended  the community for their cooperation with the REA team and the Mini-Grid developer Acob Lighting Technology Limited.

What you should know

Coronation ads

Recall that Nairametrics reported on November 12, 2020, that the Federal Government through its implementing Agency, Rural Electrification Agency (REA), commissioned a 100KW solar hybrid mini-grid power plant in Ebonyi State.

The Agency disclosed that the completed project is in line with the government’s mandate, as the present administration seeks to provide remote communities with clean and affordable energy, through strategic investment in the deployment of Mini-grid systems that will provide power for 5 million homes in 2021.

Continue Reading

Financial Services

NAICOM issues operational licences to 6 insurance firms and 1 reinsurer

Six new insurance firms and one reinsurance company have been issued operational licenses by the National Insurance Commission (NAICOM).

Published

on

The National Insurance Commission (NAICOM) has issued operational licenses to six new insurance firms and one reinsurer.

This was disclosed by the NAICOM boss, Mr. Sunday Thomas, while handing over operational licenses to the five firms at the NAICOM Head Office in Abuja today.

The new firms are Heirs Insurance Limited (General); Stanbic IBTC Insurance Limited; Heirs Life Assurance Limited; Enterprise Life Assurance Company Nigeria Limited; and FBS Reinsurance Limited, Salam Takaful, and Cornerstone Insurance Co. Limited.

According to Mr. Thomas, “The National Insurance Commission (NAICOM) received applications from the under listed companies for registration as Insurance and Reinsurance Companies to transact insurance and reinsurance business in Nigeria. In fulfilment of the statutory provisions of extant laws for the registration/licensing of insurance Companies, the general public is hereby informed that the Commission has commenced the process of registering the companies.”

What you should know

GTBank 728 x 90

Heirs Insurance Limited (General) has Mr. Olaniyi Stephen Onifade as its Managing Director; Mr. Akinjide Orimolade, Stanbic IBTC Insurance Limited; Mr. Abah Okoriko, Heirs Life Assurance Limited; and Mrs. Fumilayo Abimbola Omo, Enterprise Life Assurance Company Nigeria Limited.

FBS Reinsurance Limited is to be led by the former Commissioner of Insurance, Fola Daniel, along with other seasoned professionals from the brokerage and underwriting units of the industry like Bala Zakariyau, the former Managing Director of Niger Insurance, Ahmed Olaniyi Salawu of the Standard Insurance Consultants, and Wole Oshin of the Custodian Investment Plc.

Takaful Insurance is based on sharia or Islamic religious law, which explains how individuals are responsible for the protection of one another. Takaful Insurance policies cover health, life, and general insurance needs. It is introduced as an alternative to those in the commercial insurance industry, which is believed to go against Islamic restrictions on interest, gambling, and uncertainty principles – all of which are outlawed in sharia.

Coronation ads

Continue Reading