By Adedapo Adesanya
President Bola Tinubu has approved the establishment of an Infrastructure Support Fund (ISF) for states as part of measures to cushion the effects of the petrol subsidy removal on Nigerians.
A statement by Mr Dele Alake, Special Adviser to the President on Special Duties, Communications and Strategy, said the approval was disclosed at the monthly meeting of the Federation Account Allocation Committee on Thursday in Abuja.
He said that the new Fund would enable states to intervene and invest in the critical areas of transportation, including farm-to-market road improvements, agriculture, encompassing livestock and ranching solutions.
Other areas are health, with a focus on basic healthcare; education, especially basic education; power and water resources, which will improve economic competitiveness, create jobs and deliver economic prosperity for Nigerians.
Mr Alake also said that the committee also 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.
He said that out of the June distributable revenue of N1.9 trillion, only N907 billion would be shared among the three tiers of government in July, while N790 billion would be saved, and the rest to be used for statutory deductions.
He explained that these savings would complement the efforts of the ISF and other existing and planned fiscal measures aimed at ensuring a tangible improvement in the lives of Nigerians.
Mr Alake said the committee commended Tinubu for the bold decision to remove the petrol subsidy and for providing support to the states to cushion the effects of the removal.
Recall that Business Post reported that the N907.054 billion total distributable revenue included distributable statutory revenue of N301.501 billion, distributable Value Added Tax (VAT) revenue of N273.225 billion, Electronic Money Transfer Levy (EMTL) revenue of N11.436 billion and Exchange Difference revenue of N320.892 billion.
In June 2023, the total deductions for the cost of the collection were N73.235 billion, and the total deductions for savings, transfers, and refunds were N979.078 billion, while the balance in the Excess Crude Account (ECA) was $473,754.57.
Out of the N907.054 billion, the federal government received N345.564 billion, the 36 state government received N295.948 billion, and the local government councils received N218.064 billion, while N47.478 billion was shared to the relevant oil states as 13 per cent derivation revenue.
Dipo Olowookere