The federal government on Wednesday proposed reduction in size of the approved budget for 2020 by N1.5 trillion amidst the global oil price crash.
The proposal, which would be forwarded to the national assembly for consideration and approval, is seeking to reduce the approved N10.59 trillion 2020 budget to N9.09 trillion.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed this on Wednesday, according to the News Agency of Nigeria (NAN).
Ahmed pointed out the move has become imperative considering the dwindling global oil price which saw Nigeria had a worst case of $30 per barrel at 2.18 million barrels per day.
Her words: “From the expenditure side, the president has approved that we should cut down the capital expenditure budgeted by 20% across ministries, departments and agencies.
“Also, a 25% cut of all government-owned enterprises and these include the ones that are in the national budget, the 10 top ones we included in the 2020 budget but also those we did not include in the 2020 budget.
“So, all of these would have their recurrent expenditure and capital expenditure cut down by 25%.
“By these measures, we expect that the operating surpluses that would accrue to the federation will increase because when their operational expenditure reduces the operating surpluses that they remit to the treasury will also increase significantly.
“I can just say that the bulk cut is about N1.5 trillion, the reduction in the size of the budget. And this includes N457 billion from PMS under-recovery.”
The minister also announced that the planned recruitment of into the country’s civil service has been put on a hold, except for essential services such as security and health services.
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. We are maintaining our workforce as it is but we are just stopping the increase in the size of the nominal roll.”