The Nigerian Minister of Finance, Budget and National Planning, Zainab Ahmed, said the resurgence of COVID-19 in Europe which has led to lockdowns and re-enforcement of restrictions and has caused oil prices to decline in the international market threatens the country’s 2021 budget.

The estimated oil price of the 2021 budget is $40 per barrel, although the current market price is $37. She made this known on Thursday, 5^th November 2020, when she was at the Senate to defend the budget of the ministry of finance, after the Chairman of the Panel, Senator Adeola Olamilekan, asked about the Federal Government’s contingency plans to protect the budget from the shocks of falling oil price.

She dismissed the rumours that the Federal Government may increase Value Added Tax (VAT) again by 2.5% in 2021. She also addressed the complaints from various ministries and parastatals on the lack of adequate allocation.

Excerpts from her submission:

“The actual projection was $40 per barrel and that is the average price that we projected for the year. Some of the institutions that are responsible for tracking the price of crude oil, actually have crude oil prices going as far as $50, $52 per barrel.”

“We took the safer path. It seems the second wave of COVID-19 in Europe is affecting us. We are hoping to have clarity as to which direction to take in the next week or two.”

“As for the finance bill, we have the draft. There will be no increase in VAT or any form of taxes because we see 2021 as a year of recovery.”

“Everybody is claiming scarce resources, but we can’t go beyond what is available.”