Four months after to end of his administration, President Muhammadu Buhari approved the Nigerian National Petroleum Corporation Limited, to invest N1.9 trillion in the reconstruction of 44 federal roads under the tax credit policy.
Media Assistant, Media and Publicity (Office of the Vice President), Laolu Akande, who made the disclosure at the end of the weekly Federal Executive Council (FEC) meeting, yesterday, in Abuja, said the approval fell under the Federal Government Road Infrastructure Development and Refurbishment Investment Tax Credit Policy Phase 2 to be executed by NNPCL and its subsidiaries.
He said: “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.”
The approval is coming 15 months after NNPCL expressed interest in investing in the reconstruction of selected federal roads to sustain the smooth supply and distribution of petroleum products across the federation.
President Buhari had, on January 25, 2019, signed Executive Order 007, which birthed the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, geared at unlocking funding from the private sector to critical road infrastructure in the country.
The presidential order was to empower private companies to finance the construction or refurbishment of federal roads designated as “Eligible Roads” under the scheme and recoup their investments through a deduction from their yearly Companies Income Tax.
The program is a public-private partnership (PPP) intervention that enables the Federal Government to leverage the private sector’s capital and efficiency for the construction and refurbishment of critical road infrastructure in key economic areas in Nigeria.
Under the initial program, the NNPC is constructing a total of 1,804.6 kilometers of roads at a total cost of N621,237,143,897.35.
A breakdown of the funding showed that the North Central geo-political zone, made up of the Federal Capital Territory (FCT), Benue, Kogi, Kwara, Nasarawa, Niger, and Plateau states, got the highest share of N244.87 billion for the construction of 791.1 kilometers of road.
The South-South region, comprising Akwa Ibom, Bayelsa, Cross River, Delta, Edo, and Rivers states, emerged second highest beneficiary, with N172.02 billion for a total of 81.9 kilometers of road.
The Southwest, consisting of Ekiti, Lagos, Osun, Ondo, Ogun, and Oyo states, followed with a total allocation of N81.87 billion for the construction of 252.7 kilometers of roads.
The NNPCL allocated N56.12 billion to North East, comprising Adamawa, Bauchi, Borno, Gombe, Taraba, and Yobe states, for the construction of 273.35 kilometers of roads under the scheme.
The Southeast geo-political zone, made up of five states, including Abia, Anambra, Ebonyi, Enugu, and Imo, got N43.28 billion allocation for the construction/rehabilitation of 122 kilometers of road.
The national oil company allocated N23.05 billion for the rehabilitation of 283.5 kilometers of road to the Northwest geo-political zone, consisting of Kaduna, Katsina, Kano, Kebbi, Sokoto, Jigawa, and Zamfara states.
The road projects are being funded by NNPC and the amount is deducted by the Federal Inland Revenue Service (FIR) from the NNPCL’s tax obligations.