The federal government is proposing to cut the 2020 budget
size by N1.5 trillion from N10.59 trillion to N9.09 trillion.
Zainab Ahmed, the minister of finance, budget and national
planning, announced the proposed cuts on Wednesday.
The proposal has to be approved by the national assembly.
“From the expenditure side, the president has approved that
we should cut down the capital expenditure budgeted by 20% across ministries,
departments and agencies,” NAN quoted her to have said.
“Also, a 25% cut of all government-owned enterprises and
these include the ones that are in the national budget, the 10 top ones we
included in the 2020 budget but also those we did not include in the 2020
budget.
“So, all of these would have their recurrent expenditure and
capital expenditure cut down by 25%.
“By these measures, we expect that the operating surpluses
that would accrue to the federation will increase because when their
operational expenditure reduces the operating surpluses that they remit to the
treasury will also increase significantly.”
She said the ministry of budget and national planning has
issued guidelines to other ministries on how the adjustments would be made.
“I can just say that the bulk cut is about N1.5 trillion,
the reduction in the size of the budget. And this includes N457 billion from
PMS under-recovery,” she explained.
The minister said the planned recruitment into the country’s
civil service would be suspended except for essential services such as security
and health services.
She said the federal executive council also agreed to
restore and compliant by the civil service retirement regulations, while the
modalities for the implementation of the social investment programme would also
be reviewed.
Ahmed also disclosed that the council agreed to review the
non-essential tax rebate currently being implemented to cut down on tax
expenditure so as to generate more revenue.
“On recruitment, there is already an instruction to stop
recruitment. What the agencies have been doing is replacement but even that is
being suspended,” she said.
“When things improve we will go back to the issue of
recruitment but for now, our wage bill is already very high.
“The president has directed that salaries and pensions must
be paid unfailingly. We are maintaining our workforce as it is but we are just
stopping the increase in the size of the nominal roll.”
According to the minister, the budget revisions would be
based on a worst-case scenario of $30 per barrel at 2.18 million barrels per
day.
President Muhammadu Buhari had constituted a committee to
examine the impact of the coronavirus outbreak on the economy and how to fund
the 2020 budget after oil price fell below the budget benchmark.
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