Coronavirus: Nigeria may review 2020 budget – FG

Zainab made this known to newsmen at the end of the Federal Executive Council (FEC) meeting, which was presided over by President Muhammadu Buhari at the State House, Abuja, on Wednesday, March 4, 2020.

According to her, the international oil price has dropped to 52dollars below the budget benchmark of 57dollars per barrel, impacting negatively on the nation’s estimated revenue for the fiscal year.

The minister, however, revealed that the nation’s oil production had increased between two million barrels and 2.1 million barrels per day.

“We are concerned in the current drop in oil price because it’s now below our budget.

“I am glad to inform you that our oil production as at today is two million barrel per day and at times slightly higher. That in its self will be a cushioning effect for us in the current oil price.

“We will do a mid-term review, and if the impact is so much, we will need to do an adjustment in the budget working together with the National Assembly.”

Zainab further said that the Council have approved the issuance of a sovereign guarantee to the tune of 85 per cent of the Engineering Procurement and Construction (EPC) contract for the Ajaokuta-Kaduna-Kano gas project.

She said: “This is not a new contract; it was previously approved by council in 2017 in the sum of $2.89 billion. The memo of today is at a revised cost of 2.571 billion dollars, equivalent to a 10 percent discount of the original sum.

“The previous contract was a contractor financing model, the contract that has been approved today is an EPC lump sum contract with the NNPC required to pay 15 per cent of the contract amount while the 85 per cent will be provided by Cynosure of China in the form of loan facility with a sovereign guarantee.

The facility has an interest of 3.7 per cent with a 12-year repayment period and three years moratorium period.

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“We have done an extensive review of this project and we are satisfied that the cash flows from the Ajaokuta-Kaduna-Kano gas pipeline project is sufficient to pay the facility itself.

“This project is one of the cardinal policies of this administration and it is very strategic to national development,’’ she added.

Ahmed explained that the project has a lot of positive impact on the nation economy, saying it would spur industrialisation and industrial growth as gas-based industries and power generating companies would be the key beneficiaries.