President Muhammadu Buhari on Monday raised a six-member committee to urgently assess the impact of the ravaging coronavirus pandemic on Nigeria’s economy, and how to downsize the 2020 national budget.
The committee is chaired by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, and is expected to lower the budget revenues in view of tumbling crude oil price that is currently hovering around $30 per barrel as a result of the Coronavirus outbreak.
The federal government budget was predicated on a price of $57 per barrel of crude oil, a commodity on which the country’s economy largely depends.
Other members of the committee are the Minister of State for Petroleum Resources, Timipre Sylva; Minister of State for Finance, Budget and National Planning, Clement Agba; Central Bank of Nigeria (CBN) Governor, Godwin Emefiele; and Group Managing Director of the Nigeria National Petroleum Corporation (NNPC), Mele Kyari.
They are to turn in a report to President Buhari between tomorrow and Wednesday, after which more of its decisions will be made available to the press.
Emerging from their inaugural meeting with the President at the Aso Rock Villa, chairman of the committee reiterated government’s position to journalists that the 2020 national budget would be reviewed downwards with crude oil prices already tumbling as a result of the infectious respiratory disease that broke out in China last December.
According to her: “We just met with the President to discuss the matter of the impact of the Coronavirus on our economy and Mr. President has formed us into a committee, with the Minister of State, Petroleum Resources, the Central Bank Governor, the GMD of NNPC and myself as members.
“Our mandate is to make a quick assessment of the impact of this Coronavirus on the economy, especially as it affects the crude oil price. We will be writing a report and brief Mr. President tomorrow or Wednesday morning and after that we’ll also have more substantial information for the press.
“But it is very clear that we will have to revisit the crude oil benchmark price that we have, of $57 per barrel, we have to revisit it and lower the price. Where it will be lowered to is the subject of the work of this Committee.
“What the impact will be on that is that there will be reduced revenue to the budget and it will mean cutting the size of the budget. The quantum of the cut is what we are supposed to assess as a committee.”
Asked if Nigeria would engage in mediatory discussions with oil producing countries like Russia that spiking oil production with attendant glut and lower prices, Timipre Sylva replied that such engagements would be done at the level of Organisation of Petroleum Exporting Countries (OPEC).
His words: “On the issue of engaging Russia, we as a member of OPEC are not in a position to take that engagement on our own unilaterally. There was a disagreement between OPEC and OPEC Plus. It’s not just Russia, but the biggest producers within OPEC and OPEC Plus are Saudi Arabia and Russia.
“We believe that in the coming days when all of us would have begun to see effect of the reduction of prices, OPEC and OPEC Plus might need to meet again and reconsider our positions.
“Meanwhile, we expect also that a lot of discussions are going on at the level of Saudi Arabia and Russia, but as Nigeria, we are not in a position to begin to engage members on this matter.”