The Federal Government has revised downward the revenue projection for the 2020 budget by N3.3tn from the initial approved amount of N8.41tn to N5.08tn. The revised revenue projection is contained in a proposal sent to the National Assembly by the executive.
The reduction became imperative in view of of the negative impact of the coronavirus pandemic, which had led to disruptions to global supply chains, sharp drop in global crude oil prices, turmoil in global stock and financial markets.
These outcomes have had severe consequences on households’ livelihoods and business activities, resulting from drop in global demand, declined consumer confidence and slowdown in production. Based on the revenue parameters underlying the revised proposal, the Federal Government revised downwards the oil price benchmark from $57 per barrel to $30 per barrel.
Similarly, the oil production volume was reduced from 2.18 million barrels per day to 1.7 million barrels per day. The exchange rate was however raised from N305 to a dollar to N360 to a dollar based on the devaluation of the naira by the Central Bank of Nigeria. An analysis of the revenue items showed that oil revenue suffered the highest reduction of N2.38tn from the initial approved amount of N2.63tn to N254.25bn.