The Minister of Finance, Budget, and National Planning, Zainab Ahmed has revealed that the country will depend on local and foreign borrowings as well as proceeds of privatization to the tune of N5.36 trillion naira to plug the deficit in the 2020 budget.
She made this disclosure after the Federal Executive Council, FEC meeting on Wednesday. She did not identify the assets to be sold.
The Minister also revealed that the cabinet has approved a revised budget of N10.52 trillion at the meeting, against the N10.59 trillion approved earlier. Ahmed added that expenditures related to COVID-19, which was not included in the budget, has now been added to it.
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The revised budget, which requires the approval of the National Assembly, was based on assumption that crude oil price would be pegged at $25 per barrel, the output of 1.94 million barrels per day, and an exchange rate of N360 to $1.
The proposals require parliament’s approval before being signed into law by the president.
With global oil prices plunging, the government had said this year’s budget would shrink by about 15% and that it would switch to domestic naira borrowings. However, Ahmed said on Wednesday that the reduction amounted to just 71.5 billion naira to “adequately respond to the COVID-19 pandemic”.
The coronavirus outbreak and an oil price plunge have magnified headwinds in the Nigerian economy, which relies on crude sales for government revenues, triggering a historic decline in growth and large financing needs as well as weakening the naira.
The government expects the economy, which recently recovered from a 2016 recession, to shrink by 3.4% this year.
Africa’s most populous country recorded its first confirmed coronavirus case in late February. There have been 4,787 recorded cases and 158 deaths out of 200 million inhabitants.
International lenders include the International Monetary Fund (IMF), which last month approved $3.4 billion in emergency financial assistance for Nigeria, the World Bank, Islamic Development Bank, and Afrexim Bank, Ahmed said.
