People & Money
Coronavirus Resurgence Poses Risk to Nigeria’s 2021 Nigerian Budget
The second wave of the COVID-19 pandemic in Europe, which caused oil prices to plummet in the international market, has placed Nigeria’s 2021 budget estimate in a precarious situation.
The appropriation bill currently being debated by the National Assembly was predicated on $40 per barrel. However, the current price of crude oil in the market stands at $37.
Speaking on Thursday when she appeared before the Senate Committee on Finance to defend her ministry’s budget, the Minister of Finance, Budget and National Planning, Zainab Ahmed, said the resurgence of the pandemic was not anticipated during the preparation of the 2021 budget.
She said the Federal Government “took the safer path” to benchmark the crude oil price in the 2021 budget but the second wave of COVID-19 in Europe threatened the estimate.”
The Chairman of the panel, Solomon Adeola, had asked the Minister about the contingency plans the Federal Government had put in place to insulate the budget from the shocks of falling oil price.
Ahmed said in response: “The actual projection was $40 per barrel and that is the average price that we projected to be for the year.
“Some of the institutions that are responsible for tracking price of crude oil, actually have crude oil price going as far as $50, $52 per barrel.
“We took a safer path. It seems the second wave of COVID-19 in Europe is affecting us. We are hoping to have clarity as to which direction to take in the next week or two.”
While debunking insinuations that the federal government was planning to hike Value Added Tax, VAT, by 2.5 per cent in 2021, she said, “There will be no increase in VAT or any form of taxes because we see 2021 as a year of recovery – not only got but businesses as well.”