Nigeria’s Federal Government initially predicted a 2.9% growth for the country’s economy in 2020. Following the outbreak that left a ripple effect and negative jab on the economy however, they disclosed that the economy will shrink by 3.4%.
Ben Akabueze, the country’s Director-General of the Budget Office, implied in a web conference on the effect of low oil prices on Nigeria’s economy. According to him, with the shocking outbreak of the pandemic disease around the globe, there is an expected more than 80% decline in the country’s oil revenues.
Zainab Ahmed, the country’s Minister of Finance, Budget, and National Planning disclosed the government’s plan to reduce this year’s budget oil price benchmark to $10 per barrel a drop from the initial $20 per barrel following March 18 changed price.
One of the impacts of the oil and gas upstream sector’s budget cuts is that the country’s oil and gas project would finish much later than planned. Zainab Ahmed made known that the country looks to postpone debt service obligations to “2021 and beyond”. This isn’t for the country’s debt to be forgiven, it just a change in the country’s obligations as a result of the outbreak.
The Minister of Finance, Budget, and National Planning made known that the country was spending about 58% to 60% of revenues to service debt which made the Federal government’s request imperative. In the same breath, Ben Akabueze predicted that the debt servicing costs would plunge by 200 billion Naira this fiscal year.