As the effects of the Coronavirus pandemic continue to have a negative effect on global oil prices, the Nigerian Federal Government has announced massive funding cuts for its Ministries, Departments and Agencies.
The funding cut was announced through a circular issued to all Federal Government MDAs by the Ministry of Finance titled ‘Adjustment to the 2020 Appropriation Act’.
According to the circular, the drastic fall in the pride of crude oil well below the benchmark of the 2020 budget has impacted negatively on the financial resources of the Federal Government.
Due to this the government has decided to take fiscal measures that will ease the economic burden brought by dwindling revenues.
The circular further revealed that the government will now focus it’s spending on social investments and growth enhancing expenditures.
As such, Capital Expenditure funding for all Federal Government MDAs has been cut with immediate effect to give room for more pressing expenditure.
As such funding have been cut for the purchase of the following items;
- Purchase Computer software.
- Purchase of Computers and printers.
- Purchase of Vehicles/Trucks/Vans
- Purchase of Motor vehicles/Motorcycles.
- Purchase of Office/Residential Furniture and fittings.
- Purchase of Photocopy machines/Scanners/Shredding Machines.
- Purchase of Residential/Office buildings.
- Purchase and Acquisition of land.
- Rehabilitation of buildings.
- Empowerment Programmes.
- Capacity building/Training
- Construction of Office/Residential Building.
- All other non-essential expenditures.
The circular however pointed out that only personnel costs will be carried by the federal government as it advised MDAs to cut their capital expenditure budget by 25 percent.
See the attached circular below:
