President Bola Tinubu has taken a significant step in mitigating the impact of the petrol subsidy removal on Nigerians by approving the establishment of the Infrastructure Support Fund (ISF) for all 36 states of the Federation. In a move aimed at supporting the states in coping with the subsidy removal aftermath, the ISF will be dedicated to investing in critical sectors such as transportation, agriculture, health, education, power, and water resources.
The approval of the Infrastructure Support Fund came after the monthly meeting of the Federation Account Allocation Committee (FAAC) held in Abuja, as announced by the presidential spokesman, Dele Alake, in a statement on Thursday. This fund will enable the states to address pressing issues in areas like farm-to-market road improvements, livestock and ranching solutions, basic healthcare, basic education, and economic competitiveness through better power and water resources.
The statement further revealed that out of the distributable revenue of N1.9 trillion for June 2023, only N907 billion will be shared among the three tiers of government, while a substantial amount of N790 billion will be saved, with the remaining being allocated for statutory deductions.
Emphasizing the government’s commitment to ensuring that the subsidy removal brings tangible improvements to the lives of Nigerians, the savings from the revenue distribution will complement the efforts of the Infrastructure Support Fund and other fiscal measures that have been planned or are already in place.
The Committee commended President Tinubu for his bold decision in removing the petrol subsidy and, more importantly, for providing essential support to the states to cushion the impact of this move on the citizens.
In addition to the ISF, the Committee also reached a resolution to save a portion of the monthly distributable proceeds. This measure aims to minimize the potential effects of increased revenues resulting from the subsidy removal and exchange rate unification on money supply, inflation, and the exchange rate.
