Zainab Ahmed

Following the significant drop in oil price, the Nigerian government is concluding plans to review the oil benchmark for the 2020 budget downward to $20 per barrel.

The Minister of Finance, Budget and National Planning Minister, Zainab Ahmed, was reported by Reuters on Tuesday to have disclosed this during a web conference on the impact of low oil prices on Nigeria’s economy

The government had earlier reviewed the oil benchmark for the 2020 budget downward from $57 per barrel to $30 per barrel due to the decline in oil price and the impact of COVID-19.

The Minister of Finance, Budget and National Planning Minister, Mrs Ahmed also intimated on plans by FG to cut oil production to 1.7 million barrels per day (mbpd), from the 2.1 mbpd previously proposed in the budget.

“We are in the process of an amendment that is bringing down the revenue indicator to $20 per barrel.”

Other key highlights from the conference include; plans to defer debt service obligations to 2021 and beyond until macro conditions improve.

An 80% drop in estimated net oil & gas revenue available for Federation Account Allocation Committee (FAAC) distribution to N1.1 trillion against the N5.5 trillion previously earmarked.

A marginal drop in Customs projected revenue to N1.2 trillion in 2020 from the previous N1.5 trillion.

While the amount accruable to the federation account is now projected at N3.9 trillion from the initial N8.6 trillion.

The government is also looking at providing support for the aviation sector as part of measures to alleviate the impact of COVID-19.