President Muhammadu Buhari has given the Nigerian National Petroleum Company Limited (NNPC) the green-light to invest additional N1.9 trillion in the reconstruction of 44 federal roads under the tax credit policy.
This was disclosed on Wednesday after the Federal Executive Council (FEC) meeting, presided over by Vice President Yemi Osinbajo, according to a statement.
Laolu Akande, media assistant, media and publicity, office of the Vice President, said the FEC approved the recommendation to invest in the reconstruction of selected federal roads under the Federal Government Road Infrastructure Development and Refurbishment Investment Tax Credit Policy phase 2 by the NNPC and its subsidiaries.
“So, the council approved the proposal by the Ministry of Works and Housing for the reconstruction of 44 proposed federal roads with a total length of 4,554 kilometers in the total sum of N1.9 trillion,” he said.
The approval comes 15 months after the NNPC expressed interest in investing in the reconstruction of selected federal roads in order to sustain a smooth supply and distribution of petroleum products across the country.
President Muhammadu Buhari had on January 25, 2019, signed the Executive Order 007, which was the instrument that brought about the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, with the aim of unlocking funding from the private sector to critical road infrastructure in the country.
The Executive Order 007 was designed to empower private companies to finance construction or refurbishment of federal roads designated as “eligible roads” under the scheme and recoup their investments through deduction of the approved total costs expended on the project from their annual Companies Income Tax (CIT).
The road infrastructure scheme is a public-private partnership intervention that enables the federal government to leverage private sector capital and efficiency for the construction and refurbishment of critical road infrastructure in key economic areas in Nigeria.
Under the initiative, the private participants of the scheme provide the funds for the construction or refurbishment projects and in exchange, the participants are entitled to recoup the funds provided as a credit against the CIT they are expected to repay.
Under the initial programme, the NNPC is constructing a total of 1,804.6 kilometres of roads at a total cost of N621.24 billion.
A breakdown of the project funding showed that the North-Central geopolitical zone, got the biggest chunk of N244.87 billion for the construction of 791.1 kilometres of road, according to the statement.
The South-South emerged the second biggest beneficiary of the NNPC Road Infrastructure Development and Refurbishment project with N172.02 billion for a total of 81.9 kilometres of road.
The South-West followed with a total allocation of N81.87 billion for the construction of 252.7 kilometres of roads.
The NNPC allocated N56.12 billion to the North-East for the construction of 273.35 kilometres of roads under the scheme.
The South-East got N43.28 billion allocation for the construction/rehabilitation of 122 kilometres of road.
The NNPC allocated N23.05 billion for the rehabilitation of 283.5 kilometres of road to the North-West.
Speaking during an inspection tour of some of the projects being funded by the NNPC, Mele Kyari, the company’s group chief executive officer, said in December that the NNPC will continue to commit massive investments in critical projects in the country for the benefit of Nigerians.
The projects visited by Kyari are the Agbara-Badagry road project in Lagos and the Bida-Lambata road project in Niger State.
He expressed satisfaction with the progress of work so far done in the project sites visited, adding that the NNPC has done its part in releasing all the funds needed for their execution.
“We are very happy about the state of this road development. We are very happy with this intervention across the country, not just in this place,” Kyari said. “We are doing 1,800km across the country. We believe that this tax credit system, which Mr. President has put in place the game changer for our country.”
