OIL SLUMP.Part 2

The Director General at the Budget Office Ben Akabueze noted there would be more 80%crash in the oil revenues and based on review,the 2020 budget would contract by 3.4% instead of previous estimates of 2.9%.Then he concluded the federal government would bridge the shortfall through issuance of marginal field licences and the renewal of oil mining licences.The nation declined to borrow 850billion naira or almost $3b.from the international market and opted for local finance.This would heightens the crowding out effect and overheat the domestic debt market already with over 30tr. naira and debt servicing in the last 7years or so gulped more than 5tr.naira.The current regime expends between 50% to 60% about 200billion to debt servicing per annum.In the last fiften years,debt servicing,recurrent expenditure and subsidy cost had consumed the entire budget leaving nothing fundamental and tangible to suffering masses.Sometimes the draft budget was 80% recurent and at a time it was even 90%recurent.Reform is needed.