President Bola Tinubu has approved the creation of the Infrastructure Support Fund for the 36 states of the country.
This was made known through the Special Adviser to the President on communication, special duties and strategy Mr. Dele Alake.
In the same vein, monthly distribution from the federation account for the month of June increased to N1.9 trillion- probably the highest in the nation’s history.
The statement reads,
- “President Bola Tinubu has approved the establishment of the Infrastructure Support Fund (ISF) for the 36 States of the Federation as part of measures to cushion the effects of the petrol subsidy removal on the people. The approval was disclosed at the monthly meeting of the Federation Account Allocation Committee (FAAC), on Thursday, July 20, 2023, 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.”
FAAC revenue increases to N1.9 trillion
Occasioned by the subsidy removal, the Federal Accounts Allocation Committee (FAAC) has seen distributable revenue rise by over 100% for the month of June 2023 to N1.9 trillion from N701 billion in May. The Federal government, therefore, decided to save a portion of it which it hopes will constitute funds for the ISF of the 36 states of the federation.
According to the statement,
- “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.
- “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.
- “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.”
What you should know
Analysts had earlier predicted an increase in government revenues in the face of subsidy removal. For the month of May 2023, the federal government and the sub-national governments shared N786.161 billion.
The removal of the fuel subsidy frees the government of the financial burden of subsidy which it can channel into other productive sectors of the economy.
