Mr David Ibidapo, an economic and financial analyst, has lauded the Federal Government’s resolve to cut costs by reducing the size of the 2020 budget by N1.5 trillion.
Ibidapo said this while speaking with News Agency of Nigeria (NAN), on Friday in Abuja.
He said it was a good thing that the Federal Government was trying to cut costs to save the economy more money.
NAN reports that the 2020 budget which was originally N10.59 trillion would, if approved by the National Assembly reduce to N9.09 trillion.
The proposed cut in budget size which was approved by the Federal Executive Council (FEC), was part of Federal Government’s measures to address the impact of COVID-19 (Coronavirus) on the Nigerian economy.
Ibidapo also said that the proposed removal of N457 billion Petrol Motor Spirit (PMS) under-recovery, otherwise known as fuel subsidy was also good for the economy at this time.
“It looks like the Federal Government has taken a nod on three major reforms now (convergence of exchange rates, ending subsidy and reducing benchmark budget crude oil price).
“However, still fixing PMS price is not deregulation.
“It is high time the Federal Government pass the Petroleum Industry Bill (PIB) and allow players in the sector take positions anticipating a rebound in the crude oil prices,” he said.
He, however said that the current situation has revealed that Nigeria needs to be intentional in its drive for economic diversification.
According to him, the decline in oil prices has shown how risky it was basing the performance of an economy on a volatile market like oil.
Meanwhile, Nigerians on hearing the reduction in petrol price from N145 to N125 took to social media to air their views on the development.
Kaposki Pompye with twitter handle @KaposkiR said at N125, petrol was still too expensive.
“It is still expensive, this is the best time to remove fuel subsidy when oil price is down.”
Another, Ogunleye Ademola with twitter handle @ogunleye_sam, said “Thanks. We not only need fuel price reduction but electricity bill reduction.”
EasyJet77@gmail.com with twitter handle @Easyjet77, said “although we were expecting it to go down below compared to other countries that do not even have fuel. Anyway it is a right step in the right direction.”
NAN reports that the Federal Government on Wednesday directed the Nigerian National Petroleum Corporation (NNPC), to reduce the pump price of PMS to reflect the global oil price changes. (NAN)