A former President of the Association of National Accountants of Nigeria (ANAN), Dr Samuel Nzekwe, has advised the federal government to redouble its efforts in reducing the cost of governance.
The former ANAN president made the call on Tuesday in Ogun State, where he stated that this was important in order to cope with the challenges posed by fluctuations in oil price in the international market.
“There is an urgent need to take drastic measures to address this development as the oil prices have fallen below the benchmark of 57 dollars per barrel in the 2020 budget.
“The country also needs to intensify its economic diversification in order to generate money to implement the budget and also absorb the shock of the falling oil price,” the former ANAN president said.
Nzekwe called on the federal government to reduce its recurrent expenditure and review upward its appropriation for infrastructure development in the country.
“There must be serious accountability and checks and balances to curb corruption,” he said, adding that efforts must be made to reduce the poverty level in the country.
Global oil prices have been unstable since January, worsening with the outbreak of coronavirus in China and its rapid spread to many countries.
The global oil benchmark, Brent crude fell to $31.02 on Monday, its lowest since mid-February 2016, but recovered slightly to $36.29 per barrel as of 6.15 pm Nigerian time.
President Muhammadu Buhari had on Monday constituted a committee to assess the impact of the coronavirus outbreak on Nigeria’s economy with a view to cutting down the size of the 2020 budget and reducing the 57 dollars oil benchmark.
Recall that Buhari had in December 2019 signed the 2020 budget of N10.59 trillion into law.
The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, had on Monday told State House correspondents after a closed-door meeting with the President at the Presidential Villa, Abuja, that the committee, which will revisit the crude oil benchmark and lower the price, is expected to submit its report to the President by March 11.
She said: “We just met with the President to discuss the matter of the impact of the Coronavirus on our economy and Mr President has formed us into a committee, with the Minister of State, Petroleum Resources, the Central Bank Governor, the GMD NNPC and myself as members.
“Our mandate is to make a quick assessment of the impact of this Coronavirus on the economy, especially as it affects the crude oil price.
“We will be writing a report and brief Mr President tomorrow or Wednesday morning and after that we’ll also have more substantial information for the press.
“But it is very clear that we will have to revisit the crude oil benchmark price that we have of $57 per barrel; we have to revisit it and lower the price. Where it will be lowered to is the subject of the work of this Committee.
“What the impact will be on that is that there will be reduced revenue to the budget and it will mean cutting the size of the budget. The quantum of the cut is what we are supposed to assess as a committee.”