Nigeria approves N169.7bn in tax credit for reconstruction of 4 roads

BY OLIVIA NNOROM

Nigeria’s central government will see N169.7 billion spent under its special tax credit scheme for the construction of four roads, Babatunde Fashola, the minister for works and housing has disclosed. It follows approval given by the federal authorities for this spending to go ahead.

The tax credit scheme was established by President Muhammadu Buhari after signing Executive Order 7, as a form of tax incentive granted for public-private partnership interventions in the construction or reconstruction of road infrastructure projects.

The minister, who disclosed this in Abuja said the project will commence with the approval of N95.232 billion for the 234 kilometres road from Bali to Sheti through Gashaka to Gembu in Taraba state.

Fashola said under the scheme, the Nigerian National Petroleum Corporation (NNPC) Limited has contributed by signing a memorandum of understanding (MoU) of N621 billion for the construction of critically selected federal roads to maintain a smooth supply of petroleum products across Nigeria.

According to the minister, “The two main memoranda relate to the uptake by the private sector in response to the tax credit programme, which we initiated in 2019, by the president’s signing of the Executive Order 7 to allow private sector finance public infrastructure in lieu of tax and then to offset it over time, using tax credits.

“The existing road, for those who are familiar with it, has no concrete stone base, it’s  just laterite on the asphalt so it doesn’t last and it’s breaking up and leading to potholes. So, we have awarded this now for reconstruction under the tax credit scheme; there’s a N20 billion provision under the NNPC tax credit scheme that will be used to kick-start this immediately.

“So, this is a road that should not suffer from sustained funding challenges now that council has approved it, and it’s a very critical road leading to the Mambilla Plateau,’’ Fashola said.

Also, Mainstream Energy Solutions, approved by the federal executive council (FEC), will invest over N74 billion in refurbishing the three roads in Kebbi and Niger states.

“The second project, which is also on a tax credit scheme approved by council, is actually three roads. The applicant, in this case, is Mainstream Energy Solutions, a major energy player in the country, is now seeking to also participate in this policy by investing about N74.4 billion,” Fashola said.