In order to mitigate the consequences of the elimination of the petrol subsidy on Nigerians, President Bola Tinubu has approved the creation of the Infrastructure Support Fund for the nation’s 36 states.
The presidential spokesperson, Dele Alake, revealed this in a statement on Thursday, stating that the permission came after the Federation Account Allocation Committee monthly meeting in Abuja.
The establishment of the Infrastructure Fund will allow states to invest in key areas of transportation, agriculture, health, education, power, and water resources. These investments aim to enhance economic competitiveness, generate employment opportunities, and promote economic prosperity for the people of Nigeria.
“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.”
The Committee decided to set aside a portion of the monthly distributable proceeds to mitigate the effects of increased revenues resulting from subsidy removal and exchange rate unification on money supply, inflation, and the exchange rate.