President Bola Tinubu has approved the establishment of the 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 Nigerians.
The presidential spokesman, Dele Alake, revealed this in a statement on Thursday, saying the clearance came after the monthly meeting of the Federation Account Allocation Committee (FAAC) in Abuja.
The new Infrastructure Fund will enable the states to intervene and invest in the critical areas of transportation, including farm-to-market road improvements; agriculture, encompassing livestock and ranching solutions; health, with a focus on basic healthcare; education, especially basic education; power and water resources, that will improve economic competitiveness, create jobs and deliver economic prosperity for Nigerians.
“Out of the June 2023 distributable revenue of N1.9 trillion, 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,” the statement read.
“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 the Committee also resolved to save a portion of the monthly distributable proceeds to minimize 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.