President Bola Tinubu has approved the establishment of an Infrastructure Support Fund (ISF) for the Federation's 36 states as part of measures to mitigate the effects of the elimination of petrol subsidies on the people.
The clearance was announced at the Federation Account Allocation Committee (FAAC) monthly meeting on Thursday, July 20, 2023, in Abuja.
According to presidential spokesman Dele Alake, the new Infrastructure Fund will allow states to intervene and invest in critical areas such as transportation, including farm-to-market road improvements; agriculture, including livestock and ranching solutions; health, with a focus on basic healthcare; education, particularly basic education; and power and water resources, all of which will improve economic competitiveness, create jobs, and deliver economic prosperity.
He also stated that the Committee was determined to save a portion of the monthly distributable proceeds in order to mitigate the impact of increased revenues--caused by subsidy removal and exchange rate unification--on money supply, inflation, and the exchange rate.
“Out of the June 2023 distributable revenue of 1.9 trillion Naira, only N907 billion will be distributed among the three tiers of government, while N790 billion will be saved, and the rest will be used for statutory deductions.
“These savings will complement the efforts of the Infrastructure Support Fund (ISF) and other existing and planned fiscal measures, all aimed at ensuring that the subsidy removal translates into tangible improvements in the lives and living standards of Nigerians.
“The Committee commends President Tinubu for the bold decision to remove the petrol subsidy, and even more importantly, for providing necessary support to the States to cushion the effects of the subsidy removal on Nigerians,†he said .