Nigeria has revealed how it will fund this year’s budget after revealing its plan to maintain the N10.5tn budget.
There was an approval by the Federal Executive Council on Wednesday that the budget be reviewed with a slight cut of N71.5bn to “adequately respond to the COVID-19 pandemic.”
With the government already dealing with huge financing gaps, the massive slash from oil demands and dwindling oil revenues arising from the coronavirus pandemic, the question has been on how it will finance its record 2020 budget.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, told reporters on Wednesday that the budget would be financed through borrowings, both local and foreign, as well as proceeds from privatisation to the tune of N5.36tn to help reduce the deficit margin.
She stated that the budget review approved at the FEC meeting assumed an oil price of $25 per barrel along with 1.94m barrels per day output of oil production at an exchange rate of N360 to $1.
The government is optimistic that this framework will guide its three-year spending plan, while the proposals require parliament's approval before being signed into law by President Muhammadu Buhari.
Ahmed also disclosed that multilateral financing institutions like the International Monetary Fund, which in April 28, approved $3.4bn emergency funding, the World Bank, the Islamic Development Bank and Afrexim Bank were
among the foreign lenders.