Finance Ministry Cuts the Presidency Budget to N10bn in Nigeria

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The Ministry of Finance of Nigeria has decided to cut the presidency budget to N10 billion against the N15.3 billion, which was proposed by the National Assembly.

The consultations about this subject took place virtually amid the fears of the coronavirus pandemic.

Mr Tijjani Umar who is the Permanent Secretary led the bilateral negotiations between the government agencies.

According to the statement, the virtual conference was attended by Chief executives, finance and account staff as well as people involved in budget planning.

Mr Umar also noted that the annual budget is prepared using the Zero-Based Budget approach and in line with the government policy.

What is the reason behind this move?

One of the reasons for such a decision here is the economy shrinking in the country. The government simply can’t afford to spend too much and the pandemic made matters worse.

Due to all of the job losses in the country, the revenue is down considerably. However, a large part of the populace is still holding on to their income but through side hustles like Forex trading which is not as heavily taxed as other activities.

In fact, the government may have had to cut even further if a large majority of the African continent didn’t trade with Nigerian forex brokers. For example, Forex trading in Uganda sometimes directly means registering on a Nigerian platform but physically being in Uganda. So such things are often complicated.

This year senators also approved the state budget of 10.8 trillion nairas ($30 billion), which is slightly more than the government proposed – 10.52 trillion naira. This is due to the fact that the parliament revised upward the average annual oil prices from $ 25, as proposed by the government, to $28.

The budget has been drawn up taking into account the fact that daily oil production in Nigeria will amount to 1.9 million barrels during the current year.

Another feature of the budget is the record deficit for the last few years. On June 2, the upper house of parliament gave its consent to the proposal of the president of the country to approve a program of foreign loans in the amount of $5.5 billion during this year.

The state budget of Nigeria, which is the leader in Africa in terms of GDP, receives about 86% of the total foreign exchange earnings from the sale of energy resources on world markets. The revenue side of the country’s budget directly depends on the situation on the world energy markets and oil prices. Nigeria is the largest oil producer in Sub-Saharan Africa and 13th in the world.

How is the COVID-situation in Nigeria?

As of September 14, the confirmed number of COVID-19 cases in Nigeria has reached 56,256, of which 12,104 are active.

According to the statistics publish by the Worldometers, the largest number of COVID-19 cases by region was detected in the country’s largest city, Lagos (16,920), followed by the capital Abuja (4,775), and Oyo State (2,980) in third.

Since the beginning of the epidemic in Nigeria, 1,0821 patients have died from the coronavirus. The largest number of victims of COVID-19 is in Lagos.

Nigeria has the third-highest number of cases of coronavirus infection detected in Africa. At the same time, in a country with a population of more than 200 million people, only 363,331 tests for SARS-CoV-2 were made.

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