…mulls bailout for aviation sector to mitigate Covid-19 losses
![](https://thenigerialawyer.com/wp-content/uploads/2026/01/SADR.jpeg")
![](https://thenigerialawyer.com/wp-content/uploads/2024/11/TheNigerialawyer-WhatsApp-Channel1.jpg")
The federal government is considering some bailout support for the aviation sector, projected to suffer severely from the Covid-19 losses, and also hopes to inject at least some N2trillion into the economy near term.
Following a free-fall in global oil prices and demand, authorities also plan to further cut 2020 oil benchmark to $20 per barrel in this year’s budget now undergoing some adjustments.
Minister of Finance, Budget and National Planning, Zainab Ahmed had announced in March that this year’s N10.59 trillion budget would be cut by about 15%, and that the oil benchmark price at $57 per barrel was no longer realizable and would be slashed to $30 per barrel.
But speaking Tuesday at the Web conference on Government Fiscal Policy Response to COVID-19 Pandemic and Oil Price Fall, Ahmed said government is reviewing revenue projections to conform to current reality, “with a slash in oil benchmark from $57 to $20 per barrel.
“We have had to scale down our auction volumes because globally the crude oil market is very slow and we are not able to sell as much crude like before.”
According to her, while government reviews the 2020-2022 Medium-Term Expenditure Framework/Fiscal Strategy Paper (MTEF/FSP) and the budget, it also galvanizing fiscal stimulus as it works out investment incentives that will help to push the effect on some key sectors of the economy.
“We also had to review a number of things that we had planned including, scaling back on investments in the upstream sector of the Nigerian oil and gas economy, which means projects will be delayed much longer than was originally planned,” Ahmed noted.
She confirmed that the blanket duty waiver granted by President Buhari for the pharmaceutical and health sector to allow for seamless import of medical equipment and supplies needed to respond to Covid-19 pandemic had taken effect since May 1, 2020.
She assured government will implement low tax regime for Small, Medium Enterprises and is committed to ensuring that the provisions in the finance Act is implemented.
“In the finance Act 2019, we had reduced taxes from 30 percent to zero for small businesses that have turnover of N25m and below, for medium enterprises that have turnover of N25m to N100m, we reduced their taxes to 20%.
“We want to make sure that those benefits are implemented, even though we increased the VAT, we had heightened the threshold for stamp duties and also expanded exemption so that the small enterprises and Nigerians of lower means are not burdened by the increase.
She said debt to revenue ratio in the planned budget is 58%-60% but that as revenues crash, government is in talks with relevant bodies on possible debt extension, deferment of some of the debt service obligations to 2021 and beyond, when revenues are projected to pick.
“This not a debt forgiveness but a rescheduling of our obligations to expand the fiscal space till next year when we will be able to resume regular repayment of these debts,” the minister clarified.
She raised concerns that the larger chunk of the budget was going into overheads and personnel costs, but reiterated plans to cut the over 1,500 Ministries, Agencies and Departments by implementing of the Oronsanye report.
Some of the recommendations in the report include taking some agencies which have the capacity to fund themselves off the national budget and also collapsing agencies with duplicated functions.
“We have not been able to make an assessment of how much savings from this implementation, but the committee that will be working on it will come up with what is required,” she stated.
Director General, Budget Office, Ben Akabueze, corroborated that the 2020 Appropriation Act was based on certain fiscal assumptions, which government is now compelled to revisit given emerging economic realities.
“In this regard, the Budget Office is currently finalizing the revised 2020-2022 MTEF/FSP, as well as an Amendment to the 2020 budget, which will provide for Covid-19 crisis intervention fund as well as other adjustments,” Akabueze stated.
He said the proposed budget will cut MDA’s capital expenditure by 20% as well as reduce overheads -except for health and security – by 16.7%.
The proposed adjustments, will however push up projected budget deficit (inclusive of the expenditures funded by project-tied loans) from N2.175trillion to N5.36 trillion.
Akabueze said this will be financed through privatization proceeds of N126bn, down from N252bn previously projected; N263.63bn to be borrowed from FGN special accounts; draw-downs on multilateral/bilateral project-tied loans of N387.3bn; and new borrowings -foreign and domestic – totaling N4.59 trillion.
Government projects that the impact of Covid-19 and oil price slump will also see net oil and gas revenues decline by 80% from N5.47trillion to N1.12trillion, slash in customs revenue from projected N1.5trillion to N1.156trillion; VAT incomes decline by N60.42billion to N2.029trillion; which would then result in total revenues accruable to Federation Account to decrease to N3.890trillion from N8.572trillion earlier projected.
Clem Agba, minister of state for National Planning who is also a member of the government Economic Sustainability Committee said they had looked at some broad objectives, including how to stabilize response to the Covid-19 pandemic, including a possible funding support for the aviation industry.
“We are also looking at how to support the aviation sector, like you know a lot of planes are packed, and this is costing almost N21bn monthly.
“So, we are looking at how to provide some form of bailout support to ensure that the industry does not crumble,” Agba noted.
He said a critical consideration of the sustainability committee is on how to boost economic activities, ease transportation of goods and persons. He said to this end government would be releasing additional funds to FERMA to undertake interventions in major roads nationwide and that they will also be working along major agro-industrial processing zone corridors.
He said the committee is also working on delivering Buhari’s 1,000 jobs projection per Local Government Areas across the country for 3 months in the dry season, beginning October this year.
He said Government projects a possible cash crunch in states from June, and may not be able to meet their obligations.
Consequently, out of the $2.5 billion concessionary facility expected from the World Bank, about $1bn will be going to states, Agba said, as he recalled the already approved $150m to be sourced from the sovereign wealth account to fund FAAC.
“If we put all these together, including government funding, the funds we expect to get from CBN, Bank of Industry and other multilateral agencies as well as grants that are being received, we expect to have about N2trillion going into the economy,” the planning minister noted.
The promotion, which commenced on January 8 and runs until February 8, 2026, offers five core maritime law books authored by Dr. Emeka Akabogu, SAN, ordinarily valued at N405,000, for just N150,000 — a 63% discount.
Interested buyers can place their orders through the following channels:
Phone: 0704 329 3271
Online Store: https://paystack.shop/aa-bookstore
Website: www.akabogulaw.com
_______________________________________________________________________
The Law And Practice Of Redundancy In Nigeria: A Practitioner’s Guide, Authored By A Labour & Employment Law Expert Bimbo Atilola
_______________________________________________________________________
[A MUST HAVE] Evidence Act Demystified With Recent And Contemporary Cases And Materials
Available now for NGN 40,000 at ASC Publications, 10, Boyle Street, Onikan, Lagos. Beside High Court, TBS. Email publications@ayindesanni.com or WhatsApp +2347056667384. Purchase Link: https://paystack.com/buy/evidence-act-complete-annotation
______________________________________________________________________
ARTIFICIAL INTELLIGENCE FOR LAWYERS: A COMPREHENSIVE GUIDE
Reimagine your practice with the power of AI “...this is the only Nigerian book I know of on the topic.” — Ohio Books Ltd
Authored by Ben Ijeoma Adigwe, Esq., ACIArb (UK), LL.M, Dip. in Artificial Intelligence, Director, Delta State Ministry of Justice, Asaba, Nigeria.
Bonus:
Get a FREE eBook titled “How to Use the AI in Legalpedia and Law Pavilion” with every purchase.
How to Order: 📞 Call, Text, or WhatsApp: 08034917063 | 07055285878 📧 Email: benadigwe1@gmail.com 🌐 Website: www.benadigwe.com
Ebook Version: Access directly online at: https://selar.com/prv626
