President Bola Tinubu has applied the brake in the expected sharing of the N1.9trillion revenue windfall realised in June.
Instead N905 billion was shared to all the three tiers of government and another N203 billion was used to offset statutory deductions, including 13 percent derivation fund.
The Federal Government has ordered the saving of N790 billion, out of the windfall.
In addition, the Federal Government will set up an Infrastructure Support Fund for the 36 states, 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, according to Dele Alake, Special Adviser to the President on Special Duties, Communications & Strategy.
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.
The Committee 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.
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 commended 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.
