Despite crude oil surge, Nigeria won’t adjust projections for 2020 budget

By Olawale Ajayi

The Minister of Finance, Budget and National Planning, Zainab Shamsuna Ahmed has dismissed any insinuation that Nigeria will adjust her crude oil price projections in the 2020 budget.

Following the bombings on oil installations in Saudi Arabia, crude oil prices had surged to its highest of about $70 bar barrel. However, the minister said the federal government will not be in a hurry to make adjustments from the $55 per barrel benchmark in the proposed 2020 budget.

Zainab made this known while responding to questions from newsmen at a press briefing for an upcoming economic event in Abuja.

“The fact that crude oil prices have surged doesn’t mean we should be in a haste in reviewing our oil benchmark upwards. It will be a situation that will be closely monitored.

“In fact, we should not rejoice over the misfortunes of others. If Saudi Arabia with sophisticated oil installations can be attacked, then we too are also vulnerable. Therefore it is a situation we will be closely monitoring,” she added.

Also responding to the controversy which recently proposed a hike in Value Added Tax(VAT) by the federal government to 7.5 per cent, the minister clarified that the hike exempts food items, medicine and education.

“Value Added Tax is only for luxury goods. When you buy food items in the market and cook in your house, you’re not paying VAT, but when you go to an eatery to eat, you will pay VAT because the owner of the restaurant has added value to the food you’re eating.

“Due to the fierce fiscal finances being faced by the federal government and the need to implement the minimum wage speedily, the federal government increased the VAT following recommendations by an advisory committee which was headed by Bismarck Rewane, CEO of financial derivatives company Ltd.

“It is also important to note that the federal government only take 15 per cent of Value Added Tax (VAT) while state governments take 85 per cent because their fiscal crisis is even worse,” she explained.