Federal executive council (FEC) has approved an increase in the size of the revised 2020 budget by N318 billion from N10.276 trillion to N10.523 trillion.

The total budget size is N71.5 billion lesser than the original budget of N10.594 trillion and N318 billion higher than the N10.276 trillion revised budget sent to the national assembly.

Addressing journalists after the virtual meeting on Wednesday, Mrs Zainab Ahmed, minister of finance, budget and national planning said the crude oil benchmark price of $25 per barrel for the adjusted 2020 budget, up from the $20 per barrel announced by the budget office.

Ahmed told journalists that the council also approved amendment of the medium-term expenditure framework for 2020-2022.

“The council has approved our recommendations and the approval has these key parameters; crude oil price is approved at $25 per barrel.

“Crude oil production is at 1.94 million barrels per day and then an exchange rate of N360 to $1. The revised budget is now in the total sum of N10.523 trillion, a difference of just about N71.5 billion when compared to the approved budget.

“This is because, as we cut down the size of the budget, we also have to bring in new expenditure previously not budgeted, to enable us adequately respond to the Covid-19 pandemic.

“Federal government in this budget will have direct revenue of funding the budget of N5.158 billion. The deficit to this budget is N5.365 trillion and this will be financed by both domestic as well as foreign borrowing.”

The foreign borrowing, she said, would be concessionary loans from the IMF, World Bank, Islamic Development as well as Afro EXZIM Bank.

“There will also be some drawdown of previously committed loans for major ongoing projects that we will be drawing from both exiting facilities as well as some special accounts with the approval of Mr President and the national assembly.

“And also revenue that we are expecting to realize from privatization. So the borrowing, the drawdown of the multilateral loan coming from special accounts and coming from the privatisation will fund the fiscal deficit of N5.365 trillion that we have in the proposed amendment of the 2020 budget.”

The revisions are necessary to help the federal government adjust to reduced oil prices as a result of the Covid-19 pandemic.

The Cable