Nigeria to further cut oil benchmark for 2020 budget
Nigeria’s Minister of Finance, Budget and National Planning, Hajia Zainab Ahmed, says the country will further cut its crude oil benchmark for the 2020 budget to $20 per barrel as crude oil prices continue to dwindle at the international market.
The revelation came barely two weeks after the country trimmed the 2020 budget benchmark to $30 per barrel from an initial $57, following the global impact of the COVID-19 pandemic on crude oil prices.
Ahmed, who spoke while contributing to a virtual discussion at the “Citizens Dialogue Session on Government’s Fiscal Policy Decisions in Response to the Fall in Oil Prices and the COVID-19 Pandemic,” said the government was already in the process of making the further adjustments.
According to her, the economy is expected to contract by at least 3.4 per cent in 2020 largely due to cuts in productivity across the public and private sectors.
“We are in the process of another adjustment that will see us bringing down the revenue indicator to $20 per barrel,” she said.
The minister also noted that Nigeria is also seeking other avenues to shore up cash including lobbying international creditors for debt forgiveness and restructuring.
Nigeria largely depends on receipts from crude oil sale to fund payroll and expenditures but the coronavirus pandemic has hugely devastated the global economy and sent crude oil prices tanking to levels haven’t seen in decades.