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COVID 19 Forces the Government To Review The 2020 Fiscal Budget As Oil Workers Cry Out Over Planned Mass Sack

By Stephen Ubanna

Hopes of the Federal government raising the money from both the oil and non-oil sectors of the economy  to finance the 10.33 trillion proposed  2020  fiscal budget appears slim. This is because of the negative impact of the Wuhan Town in Hebei Province of the Asian country of China emerged Coronavirus, popular COVID 19 on the economy.

This  may have forced  Hajia Zainab Ahmed, minister of Finance, Budget and National Planning and her Staff at the instance of President Muhammu Buhari to take another look at the 2020 budget in order to make the necessary amendments to fit the reality on ground.

 Given an insider information on the review of the budget which had been distabilised by the Coronavirus   that had  resulted in a one month lock down of Lagos, Abuja, the Federal Capital Territory, FCT, and Ogun, because of its proximity to Lagos as well as well as the shut- down of the five major International Airports in the country, the minister had said there was no going back on the review.

According to her,  the government  had already  dropped the $57 per barrel benchmark used in calculating the revenue from the oil sector this year to $30. She disclosed that the oil benchmark  been dropped further  to $20 per barrel  to reflect  the current price in the international oil market.

Based on the initial 2020 budget estimation of N8.6 trillion  which  was presented by President Muhammadu Buhari to the National Assembly last December  and approved without  delay, an aggrieved  minister reportedly  confirmed that it had been projected that N3.9 trillion would be earned from the oil sector sector alone .

The impact of the COVID 19 on the sector was so worrisome as it was said to have also  resulted  in 80% drop in the estimated net oil and gas  revenue  available to  for the Federation Allocation Committee, FACC, for distribution to the 36 states of the Federation and the FCT to N1.trillion as  against the N5.5  trillion that was  initially budget for it. She had blamed the  drop in the 2020 oil revenue projection to the government’s plan cut of  production  to 1.7 mbd,  from the 2.1 mbd proposed for export .

This may have also affected the proposed revenue expected from the non oil-sector of the economy, particular, Customs, from the initial N1.5 trillion, which was increased by the Management  to N2 trillion.  The  government  may no longer be expecting the  N1.5 trillion from  the Customs Authorities because of the shrinking Container vessels coming to the Nigerian ports and the drop in the volume of importation ,mostly from China, as a result of the deadly disease.

The Finance, Budget and Planning, minister may have  sent a signal to hameed Ali, a retired Army Colonel and Comptroller General, Nigerian Customs Service, NCS, and his men that the government may no longer  be expecting that much   but only  N1.2 trillion to be paid  into the  Federation Account This is good news to the Customs Area  Comptrollers who had  been under pressure to block areas of revenue leakage in their respective Commands in order to meet their monthly target which had been very difficult in the three months because of the COVID 19.

Mele Kolo Kyari: GMD, NNPC

 The President may have matters worse for the NCS, to even meet the N1.2 trillion revenue target, as he has ordered the   immediate  evacuation  of all imported   medical equipment and Pharmaceuticals  from the Lagos and south eastern seaports without payment of duties as part of efforts  to combat the disease   which had infected over 2,900 patients in the  country  as at Wednesday, May 7, 2020.   That much was confirmed by Tolu Ogunlesi, Special Assistant to the President on Digital and New Media in his official Twitter handle on Tuesday, May 5, 2020. He had said that that the President had given ‘’a blanket waiver of Customs duty  on all medical supplies’’ imports into the country.

Recall that the Federal  ministry of health, agencies, Corporate Organisations and big  time Hospitals  including Teaching Hospitals and individual  importers had abandoned their medical  supplies, equipment and Pharmaceuticals at the ports, particular, the Lagos ports because of high cost of Clearing . They may have abandoned the medical cargoes because of Hajia Ahmed, the minister of Finance, Budget and National Planning insistence that the government would not reduce  taxes for any  Company importing  essential medical equipment and Pharmaceuticals into the country. She had, however, given a signal that the government would waive their import duties and support them to  freight their cargoes in view of  the broken supply  chain across the world.

 The importers with their agents could heave sigh of relief as the President had directed Ali, the Customs boss to expedite action to facilitate  the clearing  of the imported  health care  equipment,  medical and other  Pharmaceutical products  lying idle at the ports and  awaiting to be cleared.

He may have also put smiles on the face of Nigerians when he said the President will be taking the final decision  on the closed borders with the neighbouring  countries of Benin Republic, Niger and the Central African country of Cameroon as soon as this pandemic is over. Feelers from the Presidency revealed that Nigeria and the neighbouring countries had reached a reasonable level of Understanding  and given a clear Commitment  of Complying  with the Economic Community of West African States, ECOWAS, trade protocols, that they were previously abusing, with the intervention of the  African Union, AU, which facilitated the setting up of the  Roch Marc Kabore, President of Burkina Faso,  Committee to mediate on the crisis. 

Note that hunreds of truck laden goods had been trapped at both sides of the  Seme/Krake, a joint  border between Nigeria and Benin, and Shaki  border  in Oyo state since August last year and now because of the border closure. Some of the transit goods importers at the Joint  Sme/Krake border, particular, were said to have paid the duty on their Consignment but could not  take delivery of it because of the delay in processing their import documents as it was caught up by the border closure.

 Hameed Ali, CG, Customs  

While the government is battling to meet the challenges of the 2020 budget, the  leadership of Nigerian Union of Petroluem and Natural Gs Workers, NUPENG and  the Petroleum and Natural Gas   Senior Staff Association, PENGASSAN, were said to  have sent a warning signal to the oil giant, Shell Petroleum Development Company, SPDC, and other multinational  and Indigenous Oil And Gas Companies not to take advantage of the COVID 19 ’’to downsize , sack or introduce  indecent  work system on its members as it would be resisted’’, an indication that they are  ready to ground the nation’s oil industry.

As a prelude to ensuring that the planned  action  of the multi-national and indigenous  Oil and Gas Companies did degenerate to the level of the Unions mobilising   members to withdraw their services  that would further make nonsense of the 2020 revenue expectation from the oil sector, the leadership of the two Oil groups were said to have  called  on the government to intervene  urgently to stop the plan ‘’to avoid  many untoward  and damaging Consequences of the actions and reactions’’.

The Unions which had issued Statement about their intended action have made it clear to those that cares to listen that they would be forced ‘’to carry out an action  that  will affect  the entire oil  industry if the plan was not halted’’.  The NUPENG and PENGASSAN officials were said to have informed Temipre Sylva, a former governor of  the Oil -rich Bayelsa state  and now minister of state, Petroleum Resources and Mele Kolo Kyari, Group Managing Director, Nigerian National Petroleum Corporation, NNPC, of their plan to cripple the industry  if the Management of the multi-national and indigenous Oil Companies dares them to lay off or sack any of their members in this trying and difficult times.

Stephen Ubanna

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