The Federal Executive Council (FEC) Wednesday approved a review of the 2020 budget and the Medium Term Expenditure Framework (MTEF) 2020-2022, Minister of Finance, Budget snd National Planning, Mrs Zainab Ahmed, has said.
The minister said this while briefing State House correspondents at the end of the first-ever virtual FEC meeting presided over by President Muhamamdu Buhari.
“The council has approved our recommendations and the approval has these key parameters; The 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.
“The 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 we are doing for 2020 are all concessionary loans from the IMF which has already been approved and has crystallized, from the 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 multilateral loans draw down coming from special accounts and coming from the privatization will fund the fiscal deficit of N5.365 trillion that we have in the proposed amendment of the 2020 budget,” he said.
The minister said the council also approved $80 million loan from the Islamic Development Bank for the construction of Abakilike ring road project.
“In addition to the loans that the minister of agriculture has mentioned, we requested on behalf of Ebonyi state government for a loan of $80 million from the Islamic development bank, for the construction of Abakilike ring road project.
“While the federal government is the one borrowing from the bank, federal government will be on-lending this loan to Ebonyi State government. We have done our debts sustainability analysis that proves that Ebonyi state has the capacity to repay this loan which is provided on a basis of Libel plus and also long tenure for repayment.
“This Ebonyi ring roads connects 13 local governments in the states as well as the neigbouring Cameroon Republic. It is a major road that will provide access to the citizens in the state, to farmers, markets and will enhance economic activities in the state and the neigbouring states will also benefit from this project,” she said.