Nigeria’s quest to fill the poor road infrastructure gap got a boost with the Nigerian National Petroleum Company Limited (NNPCL), earmarking N1.6 trillion for the rehabilitation under the Federal Government’s tax credit scheme.
Africa’s largest economy boasts of the largest road network in Africa, with only about 60,000km out of an estimated 195,000km road network paved. Some of the roads are death traps as they have been perennially starved of routine maintenance.
Meanwhile as part of the Federal Government’s efforts to improve the condition of the nation’s road infrastructure and transportation in the country, it signed an Executive Order 007 which was signed by President Muhammadu Buhari on January 25, 2019. The instrument brought about the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme with the objective to unlock 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. The Road Infrastructure Scheme is a Public-Private Partnership (PPP) intervention that enables the Federal Government to leverage private sector capital and efficiency for the construction, refurbishment of critical road infrastructure in key economic areas in Nigeria.
Participants under the arrangement were entitled to utilise the total cost, referred to as “Project Cost”, incurred in the construction or refurbishment of an eligible road as a tax credit against their future Companies Income Tax (CIT) liability, until full cost recovery is achieved.
Like any other responsible corporate citizen, the NNPC prioritizes road infrastructure as part of its Corporate Social Responsibility (CSR) Projects and became one of the companies that have keyed into the initiative. The NNPC had expressed interest to invest in the reconstruction of selected federal roads in order to sustain a smooth supply and distribution of petroleum products across the country.
Few months after announcing the release of N621 billion to revamp selected Nigerian roads, the company is planning to invest over N1 trillion for a similar purpose. In the first phase, the NNPC was expected to construct a total of 1,804.6 kilometres of roads at a total cost of N621,237,143,897.35, with the North-central getting the highest chunk of N244.87 billion and the South-south emerging the second highest beneficiary of the NNPC roads project with the sum of N172.02 billion.
SUN NEWS
