Dwindling crude oil: Nigeria won’t adjust projections for 2020 budget – Finance Minister


Following global oil prices depreciation, the minister of Finance, budget and national planning, Zainab Ahmed has dismissed any insinuation that Nigeria will adjust her crude oil price projections in the 2020 budget.

Following the bombings on oil installations in Saudi Arabia, crude oil prices had surged to its highest of about $70 bar barrel.

However, the minister said the federal government will not be in a hurry to make adjustments from the $55 per barrel benchmark in the proposed 2020 budget.

Zainab made this known while responding to questions from newsmen at a press briefing for the upcoming Nigeria Economic Summit (NES) in Abuja on Monday.

“The fact that crude oil prices have surged doesn’t mean we should be in a haste in reviewing our oil benchmark upwards. It will be a situation that will be closely monitored.

“In fact, we should not rejoice over the misfortunes of others. If Saudi Arabia with sophisticated oil installations can be attacked, then we too are also vulnerable. Therefore it is a situation we will be closely monitoring,” she added.

Also responding to the controversy which the recent proposed hike in Value Added Tax (VAT) by the federal government to 7.5per cent, she clarified that the hike exempts food items, medicine and education.

“Value Added Tax is only for luxury goods. When you buy food items in the market and cook in your house, you’re not paying VAT, but when you go to an eatery to eat, you will pay VAT because the owner of the restaurant has added value to the food you’re eating.

“Due to the fierce fiscal finances being faced by the federal government and the need to implement the minimum wage speedily, the federal government increased the Value added Tax following recommendations by an advisory committee which was headed by Bismarck Rewane, CEO of financial derivatives company Ltd.

“It is also important to note that the federal government only takes 15 per cent of Value Added Tax (VAT) while state governments take 85 per cent because their fiscal crisis is even worse,” she explained.

Meanwhile, the minister said the agricultural, manufacturing, Informational and Communication Technology sectors will be the key focus of the forthcoming NES.

Ahmed made the disclosure at a press briefing ahead of the 25th NES which has the theme “Nigeria 2050, Shifting Gears” in Abuja.

According to the minister “the conference will focus on six key sectors of agriculture, manufacturing, ICT, financial services, creative industries as well as extractive industries. This is because the summit will be setting a new agenda for Nigeria to key into the 4th industrial revolution”

She said, the economic summit which is organized by the Nigeria Economic Summit Group (NESG) in partnership with the federal government through the ministry of finance, budget and national planning serves as an avenue for robust discussion between public and private sector.

“Since the inception of the summit in 1993, the public and private sector, civil society organizations and academia have always come together with recommendations that help in shaping federal government’s key economic policies.

“There is an urgent need for a robust competitive private sector through innovations of ideas in the macroeconomic environment to cater for Nigeria’s huge population, most of whom are under the age of 35 so as   to set an agenda for Nigeria to key into the fourth revolution.

“The summit will also discuss the role of state governments in enhancing competitiveness through a stable macroeconomic growth that will drive economic growth and productivity of the Nigerian populace,” she explained.

Zainab maintained that the summit over the years have birth key economic policies of the government including the Economic and Recovery Growth Plan (ERGP) which expires by 2020, among others.

Earlier in his remarks, the chairman of the Nigeria Economic Summit Group (NESG), Asue Ighodalo said the summit will be focusing on enhancing private sector growth and productivity.

The chairman said “Only a competitive private sector growth can guarantee a conducive environment for Nigeria’s businesses and her huge population which is estimated to hit 400 million by the years 2050.

“This is why the summit this year will be a convergence point for thorough discussions between government and the private sector to advance growth and productivity of the country.”


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