Abuja
The 2021 Budget is being threatened by the resurgence of COVID-19 in Europe with the attendant decline in oil price in the international market,the Minister of Finance, Budget and National Planning, Zainab Ahmed says.
Ahmed made the disclosure on Thursday when she appeared before the Senate Committee on Finance to defend her ministry’s budget in response to a question asked by the chairman of the committee, Senator Adeola Olamilekan (APC, Lagos).
The Reporters, an online publication, gathered that the 2021 budget was predicated on $40 per barrel, where as the current price of the crude oil in the market stands at between $37 and $38 per barrel
The Finance minister said though the Federal government “took the safer path” to benchmark the crude oil price in the 2021 budget, the second wave of COVID-19 in Europe threatened the estimate.
Olamilekan 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.
Responding, the minister said: “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 the 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.”
Ahmed, however, dismissed insinuations that the Federal government might increase Value Added Tax (VAT), again, by 2.5 per cent in 2021.
“As for the finance bill, we have the draft. There will be no increase in VAT or any form of taxes because we see 2021 as a year of of recovery,” she said.
The online gathered that almost all the heads of the agencies under the committee’s supervision that appeared before the committee to defend their budgets, described their budgetary allocations as too meagre, adding that the development might affect their efforts in meeting their obligations.
The Accountant-General of the Federation, Ahmed Idris, said his agency had 37 offices in dire need of rehabilitation.
“We are grossly underfunded. We are being treated like any other MDA. We know the constraints but we can be better in terms of our ability to meet expectations and needs of Nigerian economy,” he said.
Responding, the finance minister said the budget office could not go beyond the available resources.”Every body is claiming scarce resources, but we can’t go beyond what is available,” she said.
The Director-General, Budget Office, Ben Akabueze, stressed that until the Federal government get more revenue, no agency of government would get enough allocation.
