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Thursday 19 March 2020

Coronavirus: FG to cut N1.5trn from 2020 budget

The federal government will be cutting N1.5trn from the N10.59trn 2020 Appropriation Act as confirmed by the Minister of Finance, Budget and National Planning, Zainab Ahmed.

Zainab who disclosed this after the federal cabinet meeting yesterday March 18, said the cut from capital expenditure stood at 20 %; while recurrent expenditure would incur 25%.

She said;

“We’ve written every ministry and given them guidelines on how these adjustments will be made to enable us have detailed inputs from the ministries.

“But I can just say that the bulk cut is about N1.5trn, the reduction in the size of the budget. And this includes N457bn from PMS under-recovery.”

Asides revealing that they will place an embargo on recruitment exercise and replacement, Zainab further disclosed that government will continue to pay salaries and not sack workers.

She added;

“On recruitment, there is already an instruction to stop recruitment. What the agencies have been doing is replacement but even that is being suspended. When things improve, we will go back to the issue of recruitment. But for now, our wage bill is already very high.

“The president has directed that salaries and pensions must be paid unfailingly. So, we are not looking at downsizing in anyway. We are maintaining our workforce as it is. But we are just stopping the increase in the size of the nominal roll.”

This is coming after the minister revealed that the coronavirus pandemic might lead to reduction of the 2020 budget which was passed by the National Assembly at $57 per barrel oil benchmark.

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