President Bola Tinubu has approved the establishment of an Infrastructure Support Fund (ISF) for the 36 states of the Federation as part of measures to mitigate the effects of the elimination of petrol subsidies.
The approval was revealed at the Federation Account Allocation Committee’s (FAAC) monthly meeting on Thursday.
The infrastructure fund will allow states to intervene and invest in vital infrastructure areas such as transportation, agriculture, cattle and ranching solutions, health, and education.
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It will also boost Nigeria’s economic competitiveness, create jobs, and provide economic prosperity to the country.
The Committee also agreed to set aside a portion of the monthly distributable proceeds in order to mitigate the impact of increased revenues caused by subsidy elimination and exchange rate unification on money supply and inflation and the exchange rate.
It stated that only N907 billion of the N1.9 trillion distributable revenue in June 2023 will be dispersed among the three tiers of government, while N790 billion will be conserved and the remainder will be used for statutory deductions.
These savings will supplement the efforts of the Infrastructure Support Fund (ISF) and other existing and planned fiscal initiatives, all of which are aimed at ensuring that the elimination of subsidies results in concrete improvements in Nigerians’ lives and living conditions.
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The Committee applauded Tinubu for taking the daring decision to eliminate the petrol subsidy, as well as for providing the necessary support to the states to mitigate the effects of the subsidy withdrawal on Nigerians.
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