The Federal Government of Nigeria has saved N900 billion for state infrastructure development and security from November 2023 to July 2024. This amount is deducted monthly by the Federal Accounts Allocation Committee (FAAC), with N100 billion set aside each month before revenue distribution to the three tiers of government.
An analysis of the monthly deductions, titled “Intervention to States for Infrastructure and Security,” revealed that the savings initiative began in November 2023 and has continued consistently for nine months. As of July 2024, no funds have been withdrawn from the account.
In July 2023, President Bola Tinubu approved the creation of the Infrastructure Support Fund as part of measures to ease the impact of petrol subsidy removal. The fund is intended to support states in critical areas such as transportation, agriculture, healthcare, education, power, and water resources. The goal is to enhance economic competitiveness, create jobs, and improve living standards.
The government also resolved to save part of the monthly distributable revenue to mitigate the effects of increased revenues from subsidy removal and exchange rate unification on inflation and the exchange rate. Initially, N790 billion was earmarked to complement these efforts and ensure that the subsidy removal benefits Nigerians.
While the savings began in November 2023, the specific allocation of these funds remains unclear. Additionally, the administration has saved N400 billion since assuming office, with commitments made in February and June 2024, though some months were missed.
This initiative is seen as a critical step in addressing infrastructural challenges and ensuring state governments can invest in essential development projects.
