By Balogun Damilola
In view of the crash of the prices of oil in the International market as a result of the COVID-19 pandemic, the Federal Government is seeking the approval of the National Assembly to review the 2020 budget from N10, 594, 362,364,830 as approved to N10,276, 887,197,728.
The new proposal is about N317,475,167,102 less than the approved estimate passed by the National Assembly in December 2019 and signed into law by the President.
The fresh proposal, which is being studied by the leadership of the National Assembly, is proposing a cut in the oil bench mark from $57 per barrel to $30 per barrel.
It also reviewed daily oil production of 1.70 million barrel from the initial 2.18 million barrel per day.
The proposal is expected to be tabled before both chambers of the National Assembly when they reconvene.
It also increased the exchange rate from N305 to N360 to the dollar.
It was however gathered that the Executive is proposing a 20 percent total cut in capital projects across board while a new budget line that reads Federation Provision for COVID -19 Crisis Intervention has been opened with N150 billion allocated to it.
While total transfers to some arms of government and statutory agencies was reduced from N560, 470, 827,235 to N407,805,107,692, allocations to the Judiciary and the National Assembly remained unchanged.
The National Judicial Council was allocated N110 billion while the National Assembly was allocated N1128 billion in the original 2020 budget.
Allocations to the Independent National Electoral Commission (N40 billion), Public Complaint Commission (N4.7 billion) and the Human Rights Commission (N2.5 billion)) remained unchanged.
Total amount budgeted for both foreign and local debt services remained unchanged as well as contribution to the Presidential Power Initiative and the Nigeria Sovereign Investment Authority.
The budget cut will see government expected revenue from oil and gas coming dipping from N7,670,149,780,768 to as low as N1,448,156,41,248, while expected revenue inflow from the federations account reduced from N14,117,263,649,149 to N7,99,356,848,065.
Expected revenue from non oil sources is also expected to reduce from N6.442 trillion to N5.846 trillion with corporate tax and Value Added Tax expected to contribute N1.822 trillion and N.164 trillion down from the original N1.836 and 2.25 trillion respectively.
Funds to be distributed to the three tiers of government from the Federations Account is expected to dip from N8,571 trillion to as low as N3.128 trillion.
Allocation to the Niger Delta Development Commission (NDDC) and the North East Development Commission (NEDC) was also reduced from N80.881 billion and N38.101 billion to N29.521 and N14.078 billion respectively while the Universal basic Education Commission (UBEC) has its budget cut from N111.789 billion to N61.024 billion.
The recurrent non-debit budget will reduce from N4.842 trillion to N4.738 trillion while the aggregate capital vote was reduced from N2.783 trillion to N2.628 trillion.
New borrowing by the government was increased from N1,594,986,007 to N4,438,979,663,1182, with what is described as incremental borrowing of N2.843 trillion.
A further study of the document revealed that about N120 million is to be deducted from road rehabilitation, while N330.850 million is to be educated from rehabilitation and repairs of public schools.
As at the time of this report, the leadership of the National Assembly were said to be at the meeting with some government officials including the Ministers of Finance and Petroleum, NNPC GMD among others.
Apart from the new budget line dedicated to COVID- 19 in the budget and allocated N150billion, a provision of another vote of N100 billion is provided for COVID- 19 under the Service Wide Vote, while pension and gratuity is to be marginally reduced from N46.142 billion to N109.606 billion.