COVID-19: Nigeria reviews oil benchmark, cuts revenue targets

Federal Government has cuts its revenue targets for the 2020 budget by 50 per cent, as well as the review downwards of the $57 per barrel of oil to $30 per barrel in anticipation of the economic shock occasioned by the coronavirus outbreak.

The Minister of Finance, Zainab Ahmed, disclosed this after a meeting held between the executive arm of government and the leadership of the National Assembly to review the country’s 2020 budget and Medium Term Expenditure Framework in relation to present economic reality.

Ahmed confirmed that the budget oil benchmark has now been reviewed downwards from $57 to $30 per barrel, adding that the expected revenue generation from the Nigeria Customs Service has also been reviewed downwards from N1.5 trillion to N943 billion.

The reductions in targets were carried out in anticipation to reduction in trade volumes for a worst-case scenario as well as to protect the Nigeria economy from unduly economic pressure as a result of the outbreak.

The minister added that privatisation proceeds would be cut by 50% based on the adverse economic outlook on sales of the Independent Power Projects and other assets.

Meanwhile, the Bureau of Public Enterprises had said in February that it planned to generate a total net revenue of N266.8 billion from the sale of public assets to support the implementation of the 2020 budget.

Ahmed said, “The Federal Government is working on Fiscal Stimulus Measures to provide fiscal relief for taxpayers and key economic sectors. We will incentivise employers to retain and recruit staff during the economic downturn.

“We will stimulate investment in critical infrastructure; review non-essential tax waivers to optimise revenues, and complement monetary and trade interventions to respond to the crisis.”

According to Ahmed, the Federal Government in combating the Wuhan virus would release N6.5 billion in two tranches (N1.5 billion and N5 billion) to the National Centre for Disease Control as intervention to assist in the fight against the spread of the COVID-19 disease in Nigeria. She added that the Lagos State Government also would receive financial support of N10 billion from the Federal Government to combat coronavirus spread in the state.