The Federal Government on Wednesday adjusted the 2020 budget downward from the original N10.59tn to N10.52tn.
The budget deficit is in excess of N5.3tn.
The approval was made in Abuja by the Federal Executive Council meeting presided over by the President, Major General Muhammadu Buhari (retd.), at the State House.
The new figures were captured in the revised 2020 Medium Term Expenditure Framework submitted to the council by the Minister of Finance, Budget, National Planning, Mrs Zainab Ahmed.
Parameters adjusted in the budget include the crude oil benchmark now further cut to $25 from $30.
Recall that the original benchmark was $57, but the government, in the wake of the COVID-19, had opted for $30 as crude oil prices cashed.
But FEC took another $5 out of the benchmark on Wednesday in the latest cut to settle at $25.
Ahmed, who spoke with State House correspondents after the meeting, said daily crude oil production was now 1.94 million barrels per day, while the naira-dollar exchange rate was put at N360/$1.
She stated, “The revised budget is now in the total sum of N10.52tn, a difference of just about N71.5m when compared to the approved budget.
“This is because, as we cut the size of the budget, we also have to bring in new expenditure previously not budgeted, to enable us to adequately respond to the COVID-19 pandemic.
According to the minister, the dwindling finances owing to the crude oil crash means that the budget comes with a huge deficit to be funded through foreign and domestic borrowings.
The minister said, “The Federal Government in this budget will have direct revenue of funding the budget of N5.158tn. The deficit to this budget (is) N5.365tn and this will be financed by both domestic as well as foreign borrowings.
“The foreign borrowings we are doing for 2020 are all concessionary loans from the International Monetary Fund, the World Bank, the Islamic Development as well as Afro-EXIM Bank.
“There will also be some drawdown of previously committed loans for major ongoing projects that we will be drawing from both existing facilities as well as some special accounts with the approval of Mr President and the National Assembly.”
On his part, the Minister of Agriculture and Rural Development, Mr Sabo Nanono, disclosed that the ministry sought approval for a loan of €950,000 (about $1.2bn) for the “purposes of agricultural mechanisation in this country that will cover about 632 local governments plus 140 processing plants.”
He explained that the money would be used to establish tractor serving centres in the designated 632 locations.
Nanono said, “We have made our calculation and we have come to the conclusion that if your tractor works for between N65,000 and N75,000 per day, if you know the operational cost of about N30,000 to N35,000 you will have a net profit of about N40,000.
“Our calculation is that between the period of three and four years, you will pay off the loan completely. And then you will have these assets worth over N150m. You have to understand that this country, in terms of agricultural mechanisation, is at lowest level.
“We have only about seven tractors per 100 square kilometres; Kenya has 27 tractors per 100 square kilometres. In fact, the standard is 127 tractors per 100 square kilometres.
“In most developed countries, it is about 1,000 tractors per 100 square kilometres.”