Dangote and others invested billions in rehabilitating dozens of Nigerian road networks in 4 years
Via the Road Infrastructure Tax Credit Scheme, records from the Nigerian government show that it has been able to secure N97.47bn worth of investments from the private sector, in just four years, to help fix the road infrastructure problem in the country.
Some of the investors include Dangote, Nigerian Liquefied Natural Gas companies, and BUA group amongst others.
The information was relayed via the Ministry of Works and Housing and the Ministry of Finance, Budget and National Planning, which disclosed that public-private partnerships have been responsible for the rehabilitation and reconstruction of 33 key road networks across the country in four years.
The ministry also revealed that there has also been funding of road constructions from the Nigerian National Petroleum Company Limited and SUKUK bonds, totaling N651 billion and N742.5 billion respectively.
“We are leveraging private sector capital and expertise to construct, repair, and maintain critical road infrastructure in key economic corridors and industrial clusters.” The official report from the Ministry of Works and Housing reads in part.
“Under the Road Infrastructure Tax Credit Scheme, 33 road projects covering a total length of 1,564.95 km have been approved, pursuant to which private sector companies are incentivized to invest in the construction and rehabilitation of federal and state roads, and subsequently recover their investment back through an innovative tax credit mechanism, setting off credits against corporate tax liabilities. About N97.471 billion in tax credits have been approved for issuance,” the document also entails.
Babatunde Fashola, the Minister of Works and Housing, noted that this sort of investment is common for high net-worth individuals and organizations who always express interest in constructing, developing, or rehabilitating roads in areas with high economic value.
He also disclosed that no company had defaulted in completing projects and fulfilling the requirement as it is practically impossible to do so.
“We don’t have any reported case of default. Secondly, there is unlikely to be a default because if you don’t do the work there is no payment and this is not ascertained by us. There is zero room for default. What you can classify as a default is if the contractor is unable to do the work, we change them and bring capable hands.” Fashola said.
“So, the issue of defaulting to a large extent is not present because you have to do the work and the engineers certify it before you can even get the tax rebate needed,” he added.