President Bola Tinubu has approved the establishment of Infrastructure Support Fund (ISF) for the 36 States of the federation as part of intervention measures to cushion the effects of the petrol subsidy removal on the people.
The approval was disclosed at the just concluded monthly meeting of the Federation Account Allocation Committee (FAAC), in Abuja.
A statement by Dele Alake, the special adviser to the president on special duties, communications and strategy,highlighted areas into which the funds will be deployed, including enabling the States to intervene and invest in the critical areas of transportation, including farm to market road improvements; Agriculture, encompassing livestock and ranching solutions; and Health, with a focus on basic healthcare.
Other areas listed in the statement include Education, especially basic education; Power and Water Resources, that will improve economic competitiveness, create jobs and deliver economic prosperity for Nigerians.
In another development, the Committee resolved to save a portion of the monthly distributable proceeds to minimise the impact of the increased revenues-occasioned by the subsidy removal and exchange rate unification-on money supply, as well as inflation and the exchange rate.
It was agreed that 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 790 billion will be saved, and the rest will be used for statutory deductions.
The savings, according to the statement, 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,” the statement partly read.