Following the negative effect on oil price per barrel around the world as a result of the coronavirus pandemic, the Ekiti State government has disclosed that it has concluded plans to send a supplementary budget to the state House of Assembly with the aim of reducing the N124 billion 2020 budget.
It will be recalled that the state governor, Dr Kayode Fayemi had in December 2019 signed into law the 2020 appropriation with N71 billion earmarked for recurrent expenditure representing 57 per cent and capital expenditure to gulp N53 billion which is 13 per cent of the budget.
The Commissioner for Information, Mr Muyiwa Olumilua in a statement on Thursday said the decision was taken after the virtual meeting of the State Executive Meeting via video conferencing with Dr Fayemi as the chairman.
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He noted that the state could no longer maintain the current budget in the state with the economic realities in the country, adding that the 2020 budget was prepared with $57 per barrel estimate, which has now dropped to less than $35 per barrel.
Olumilua said, “The Executive Council approved the transmission of a draft Supplementary Budget to the Ekiti State House of Assembly, seeking a downward review of the Budget 2020, to align with the current realities of the economic conditions of the State and the country as a whole. Considering that the Budget 2020 was based on an oil price benchmark of $57 per barrel, with the current global price of oil hovering between $20-$35 per barrel, it was wise for the State to adjust the budget based on a benchmark of $25 per barrel.”
He stressed that the decision of the government to reduce the budget would not in any way affect the salaries of civil servants, saying, “status quo will be maintained in that regard.”
Olumilua added that the council also approved for transmission to the State House of Assembly the Public Finance Management Bill to establish a Legal Framework for Public Finance Management in the State, which will be known as ‘Ekiti State Public Finance Management Law 2020’
“As presented by the Commissioner for Finance, being a requirement for Ekiti State Government to ensure a better performance under the Federal Government’s Fiscal Sustainability Plan (FSP), and the World Bank’s State Fiscal Transparency Accountability and Sustainability (SFTAS) programme,” the statement reads.
He disclosed that the law would stabilise the macroeconomic situation of the state, ” by controlling the State’s fiscal aggregates, such as State Government’s expenditure, revenue, and debt.”
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