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Nigeria’s President Tinubu launches infrastructure support fund to bolster economy
Nigeria’s President, Bola Tinubu, disclosed plans this week for a new Infrastructure Support Fund (ISF), intended to invigorate the nation’s economy and mitigate inflationary repercussions of the recently abolished petrol subsidy as reported by Reuters. The ISF is part of a broader effort to improve the financial strain experienced by households and small businesses following the controversial decision to scrap the decades-long petrol subsidy scheme.
The ISF is designed to enhance the country’s 36 states’ infrastructure in crucial sectors such as transportation, health, education, power, and water. According to the President’s office, the fund will facilitate essential upgrades, including the improvement of farm-to-market roads, although no details were given on the source of funding for these ambitious plans.
The fund “will improve economic competitiveness, create jobs, and deliver economic prosperity for Nigerians,” declared the presidential spokesman, Dele Alake. The announcement arrived just a day after the inauguration of a programme to distribute free grains and subsidised fertiliser, which will be overseen by the central bank.
The removal of the widely used but costly petrol subsidy, which incurred a bill of $10 billion for the government last year alone, has been met with resistance, particularly from labour unions. Critics have argued that the abrupt end to the subsidy has aggravated price inflation without any counteractive measures in place.
In response to such criticisms and as part of the initiatives to alleviate inflation, President Tinubu has also proposed to freeze 790 billion naira ($997.47 million) of the 1.9 trillion naira in federal revenue scheduled for distribution across the country’s three tiers of government in June. This decision came as the distributable revenue tripled following the subsidy’s cancellation and a policy shift to liberalise the exchange rate.
Inflation, which has stubbornly remained in double digits since 2016, rose even higher to 22.79% in June, making the need for such interventions ever more urgent. President Tinubu’s administration is grappling with these harsh economic realities as it attempts to balance fiscal responsibility with maintaining the affordability of essential goods and services for the Nigerian populace.
