The Senate declared on Tuesday that the downward review of the N10.59tn 2020 federal budget had become inevitable in view of the current global economic downturn occasioned by the outbreak of coronavirus pandemic. The red chamber made the declaration following the consideration of the Senate Joint Committee on Finance, Appropriations, National Planning and Petroleum Resources (Upstream) on the urgent solution to the economic crisis caused by the outbreak of coronavirus.

The joint panel had suggested the reduction in the number of federal agencies and parastatals, putting into perspective the Oronsanye Panel Report. It also stressed the need to prioritise both the social and the real sector of the economy, looking at their importance to the overall benefit of Nigeria. It asked the Federal Government to look into loss of revenue running into several billions of Dollars as a result of gas flaring. Other areas considered by the panel included devaluation of Naira and the removal of oil subsidy.

Presenting his report, the Chairman of the Joint Committee, Senator Solomon Adeola, said they looked at the short and long-term solutions. He said, “The short-term solution is to address the sharp drop in the crude oil price which is creating difficulties in funding the 2020 Appropriation Act as passed by the National Assembly. “The long-term solution discussed is the need to consider and pass the Petroleum Industry Bill which is yet to be laid before the National Assembly.

“This will address the issue of cost of production and gas flaring where the country’s resources are going down the drain and other issues that might affect the petroleum sector.” Adeola said his panel engaged finance and economic experts who expressed the hope that the current drop in the value of Naira and rise in the value of Dollar would be over as soon as solution was found to COVID-19.

He said, “Experts believe that funds from internal loans and bonds sourced from the capital market should be mobilised to fund infrastructural development, a model exemplified by India with population of 1.1 billion people, as this will be much cheaper for us as a nation. “They (experts) also suggested allowing funds taken out of the country to be returned into the economy without destroying the anti-corruption war of the President by providing legal instrument to ensure the return of the funds.”

He said the panel’s findings revealed that the effects of the sharp drop in the crude oil price would be felt in Nigeria from May. The senators who contributed during debate on the committee’s report supported the reduction of overhead section of the budget. They warned against tampering with personnel cost. The Senate President, Ahmed Lawan, urged the committee to continue to engage the executive on a regular basis so as to keep the Senate abreast of what the executive arm was doing.

In a related development, the Lagos Chamber of Commerce and Industry and some stakeholders have urged the government to consult the private sector in seeking a holistic solution to the coronavirus pandemic.  They said this would ensure that manufacturing, agriculture and other critical sectors of the economy did not suffer.  They noted that the ravaging coronavirus pandemic had disrupted supply chains and led to economic dislocations.

The stakeholders spoke at an event organised by the LCCI and the KPMG in Lagos on Tuesday to discuss the ‘Economic impact of coronavirus on Nigeria’s economy’. The President, LCCI, Mrs Toki Mabogunje, noted that the Covid-19 outbreak had dealt a severe blow to the global economy.

Author avatar

Post a comment

Your email address will not be published.