The Federal Executive Council (FEC) on Wednesday approved reduction in the size of the 2020 budget by about N1.5 trillion, as part of measures to address the impacts of Coronavirus disease on Nigerian economy.
The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, made this known when she addressed State House correspondents on the outcome of the Council meeting, presided over by President Muhammadu Buhari, in Abuja.
She said the proposed budget cut of N1.5 trillion, which must be approved by the National Assembly would include N457 billion from Premium Motor Spirit (PMS) under-recovery.
The minister said: “From the expenditure side, the President has approved that we should cut down the capital expenditure budgeted by 20 per cent across Ministries, Departments and Agencies.
“Also, a 25 per cent 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 per cent.
“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.
“What we have done is that we have written every ministry and given them guidelines on how these adjustments will be made to enable us have detailed inputs from the ministries.
“But 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.’’
According to the minister, other policy matter that had been discussed for implementation is for the administration to stop recruitment except for essential services such as security and health services.
She said the 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.
She, however, revealed that the Council approved that recruitment into the civil service should be suspended but the current federal government workforce would be maintained.
“On recruitment, there is already an instruction to stop recruitment. What the agencies have been doing is replacement but even that is being suspended.
“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, so we are not looking at downsizing in anyway.
“We are maintaining our workforce as it is but we are just stopping the increase in the size of the nominal roll.”
On benchmark, the minister said: “We are working on the worst case scenario of 30 dollars per barrel and also we are holding to the production numbers of 2.18 million barrels per day.
“This you will remember is approved by the National Assembly. This is our own analysis and we will start engaging the National Assembly.’’
The Minister of State for Transportation, Mrs Gbemisola Saraki, also told the correspondents that the Council approved N2billion revised cost for the completion of an inland river port in Lokoja, Kogi .
She said: “The Ministry of Transportation presented a memo to council for approval of revised estimate total cost for the completion of the construction of an inland river port in Jemata-Akpanya, Lokoja, Kogi State.
“This project actually started eight years ago, and was supposed to have been completed within a year and half, but unfortunately due to some complications, and owing to the fact that the location had been encumbered, the project stalled and is now been revived.”
According to her, the total sum for the project now stands at N6.4 billion.