…Tinubu approves infrastructure support fund for states

… FAAC shares N907 billion out of N1.9 Trillion

The National Economic Council rose from its meeting on Thursday, the second since President Tinubu’s inauguration, showing frantic efforts to cushion the effects of the removal of subsidy on petroleum products on the populace, passing some desperate resolutions to salvage the deteriorating economic situation in the country.

The Council faulted the national register compiled by the President Buhari’s administration saying it has to be subjected to integrity test and in the alternative opted to generate a social register that will permeate down to the grassroots which people in the community can relate with.

The meeting chaired by Vice President Kashim Shettima and the 36 state Governors, the Acting CBN governors and the Executive Chairman of the Federal Inland revenue Service, decided on a different strategy for the implementation of the cash transfer programme by suggesting a cash transfer program for states using their social registers and a six-month cash reward system for public servants.

The meeting which essentially brainstormed on strategies to fashion out a way to provide palliative for the poor and cushion the effect of the fuel subsidy removal also came up with six other recommendations namely:

To negotiate a new minimum wage for workers, each state should plan towards implementing a cash transfer programme based on the social register of the state, cash Award Policy for public servants for 6 months, State Governments to pay public servants their outstanding liabilities and settle pension arrears, fund medium to small scale enterprises with single digit interest rates and implement the energy transition plan which means transiting from fossil fuels vehicles to CNG.

The resolutions may not, however, be able to provide immediate succuor to the suffering of the masses as most of the items listed may require months for planning and implementation. Negotiation of a new minimum wage is a long-drawn process as there is no unanimity amongst the states. Some states are yet to comply with the minimum wage of N30,000.00 and those who have complied are owing workers in arrears.

The Nigeria Labour Congress on Tuesday cried out that committees which the federal government promised to set up for the issues of minimum wage and palliatives are yet to be constituted and came to the conclusion that the government may be playing tricks with labour.

The Council delegated Governor Chukwuma Soludo of Anambra, Bala Mohammed of Bauchi State and Dapo Abiodun of Ogun State and acting governor of the central bank to brief the press after their meeting.

The governors said the federal, state, and local governments will develop fresh registers to distribute “tax-free cash awards to ameliorate the sufferings of Nigerians.”

“The key issue discussed was on how to cushion the effect of the fuel subsidy removal and harmonisation of the exchange rates.” Governor Soludo said contrary to what the previous administration projected, it is not possible to digitally transfer money to the poorest of the poor, the majority of whom are unbankable, adding that “beneficiaries of the supposedly transferred cash could not be identified in the villages.”

NEC therefore, resolved that the states should come up with their own registers using formal and informal means to develop them, assuring that all beneficiaries at the sub-national level could easily be accessed that way.

“We need to face the problem of the fact that we don’t have a credible register,” he said. NEC further resolved to embark on massive investment in infrastructure, especially selected development of federal highways.

“We have also resolved to Knock off the wastes, reduce the convoys and move with the times, as a way of addressing the cost of governance

We questioned the integrity of the current social register because the poorest 25 percent of Nigerians have no access to even the telephones. So, sitting in Abuja and asking people to register people did not work. So, each of the state governments will now generate a comprehensive register.

The council also resolved that each state will now implement a cash transfer programme, after carrying out an enumeration of the cash register in their domains.
Other resolutions reached by the meeting will be to pay civil servants a certain amount of cash for six months, which will be tax-free, pay outstanding liabilities.

Tinubu Approves Infrastructure Support Fund for States FAAC shares N907 billion out of N1.9T

President Bola Tinubu has approved the establishment of 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.

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.

FAAC Shares N907 Billion Out of N1.9Trillion

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 N790 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.