The Federal Executive Council (FEC) has approved a revision of the 2020 Budget from N10.594 trillion to N10.523 trillion, reflecting a N71.5billion downward review.
Minister of Finance Budget and National Planning, Mrs Zainab Ahmed, who stated this while briefing State House correspondents after the virtual FEC meeting at the State House yesterday, also said an amendment to the Medium Term Expenditure Framework(MTEF) for 2020-2022 was approved.
President Muhammadu Buhari in December signed the N10.594 trillion Appropriation bill into law.
The minister also explained that FEC also approved the recommendations with key parameters, including the price of crude oil pegged at $25 per barrel, crude oil production at 1.94 million barrels per day and an exchange rate of N360 to $1.
She said: “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.
“The Federal Government in this budget will have direct revenue of funding the budget of N5.158 billion. “The deficit to this budget N5.365 trillion and this will be financed by both domestic as well as foreign borrowing.
“The foreign borrowing we are doing for 2020 are all concessionary loans from the IMF which has already been approved and has crystallized, from the World Bank, Islamic Development Bank as well as Afri- EXIM bank.
“There will also be some drawdown of previously committed loans for major ongoing projects that we will be drawing from both existing facilities as well as some special accounts with the approval of Mr. President and the National Assembly. And also revenue that we are expecting to realize from privatisation.
“So, the borrowing, the multilateral loans draw down 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.”
She also said that the council approved the purchase of three locally-manufactured boats for the Nigeria Customs Service for its surveillance and anti-corruption activities on the maritime waters.
Ahmed said that there was a push to patronize made in Nigeria goods because of the Coronavirus pandemic and also boost the economy.
Her words: “On prioritization of made in Nigeria products, as you know the President(Muhammadu Buhari) has set up an economic stimulus committee chaired by the Vice President(Prof. Yemi Osibajo). The work of the committee is to develop 12 months economic stimulus plan and we are at the final stage of that work.
“We have prioritised spending in that plan to use and consume made in Nigeria. For example some of the public works projects that will employ a lot of our youths is to be done using strictly our raw materials, so we don’t have to import bitumen for example to build our roads.
“Some of the FEC memos that were taken given today have been in council waiting in the queue for a couple of months now. The one for transport is not new, it didn’t just come today and council felt it should go because it’s been there for a long time.
“But, we have got approval from Mr. President that spending as much as possible should be made in Nigeria on goods and products that are produced in Nigeria, so that it saves our foreign exchange and also helps to grow the economy.”
Also, the minister said the request of $80 million loan from the Islamic Development Bank on behalf of the Ebonyi State government was approved by FEC
The Finance minister said that the money would be used to finance the construction of the Abakiliki ring road project.
”While the Federal Government is the one borrowing from the bank, Federal Government will be un-lending this loan to Ebonyi State government.
“We have done our debts sustainability analysis that proves that Ebonyi state has the capacity to repay this loan which is provided on a basis of libel plus and also long tenure for repayment.
”This Ebonyi ring road connects 13 local government areas in the state as well as the neigbouring Cameroon Republic. It is a major road that will provide access to the citizens in the state, to farmers, markets and will enhance economic activities in the state. And the neigbouring states will also benefit from this project.”
Also speaking at the briefing, the Minister of Agriculture and Rural Development, Alhaji Sabo Nanono, said that FEC approved a loan facility of $1.2 billion to finance the mechanisation of agriculture in the country. .
He said the planned mechanisation of agriculture would span across 632 local government areas.
Nanono added: ”Today, we presented a joint memo with the Federal Ministry of Finance in which we seek the approval for a loan facility of about 950 million Euros translated probably to $1.2 billion .
”This loan is for the purpose of agricultural mechanisation in this country –that will cover about 632 local government areas plus 140 processing plants.
”This is going to be a major revolution in the agriculture sector, that we have never seen before.’’