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.
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.
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.