Osun, other States revise 2020 budget on economic reality, Covid-19 impact
By Samuel Bankole
More of Nigeria’s sub-national are facing the current economic reality by revising their spending estimates for 2020, as the governor of Osun State, Adegboyega Oyetola joined other states in slashing this year’s budget.
Oyetola wrote on his twitter handle on Tuesday that the state budget has slashed downward the 2020 spending estimate of the state by 32 percent to N82.2 billion from the initial N119.5 billion.
According to him, “the downward review of the 2020 budget was prompted by the present economic realities occasioned by the ravaging Coronavirus. Therefore, the revised budget estimates were prepared to address the aftermath of the pandemic in our State,” Oyetola wrote on Tuesday.
The governor said he signed the revised budget into law on Monday as passed by the State House of Assembly to reflect the current economic reality.
“We are prioritizing Agric, Mining & Tourism in line with our economic recovery plan. We’ll also be providing more support for MSMEs in the State to stabilise & develop our economy,” the governor wrote in his Twitter handle.
Other State such as Borno and Lagos have taken the initiative in the last couple of months to review downward their spending estimate for the year as the impact of coronavirus pandemic disruption in economic and health across the globe persisted.
Babagana Zulum of Borno State on Monday signed the revised 2020 budget of N108.8 billion into law from the N147 billion initially planned spending estimate.
In May, the Lagos government had revealed that it plans to revise the state’s 2020 budget by 21 percent, from the N1.168 trillion hitherto approved by the State House Assembly to N920.5 billion.
The federal government has also revised its 2020 budget to reflect the sharp drop in projections for revenue from crude oil exports and the effect of the pandemic on economic activities.
However, the revised budget by the federal government was upward, at its jerked up spending plans to N10.89 trillion against the initial N10.59 trillion naira approved last year by the National Assembly.
The increase in the federal budget may have been bolstered by the disbursement of $3.4 billion facilities by the International Monetary Fund (IMF) and other external borrowings by the government from international financial institutions such as the World Bank, African Development Bank and Islamic Bank.
Experts said the increase in Nigeria borrowing at a time when the oil market is experiencing instability will further increase the debt burden for the country as Nigeria will expect to spend more in debt servicing in the coming years.
In the first half of the year, Nigeria has already expended about 58 percent of its revenue on debt servicing, further widen the debt to revenue ratio of the country.
Nigeria’s economy is expected to shrink by 5.4 percent this year, according to the International Monetary Fund (IMF) estimates, as the impact of disruptions in the global supply chain in the wake of coronavirus pandemic outbreak bits harder.#GFD