Minister of Finance, Mrs. Zainab Ahmed, has explained that the Executive Order 007 of 2019 on the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme will provide the much-needed private capital for infrastructure development in the country.
“The scheme will incentivise private sector investment in Nigerian roads across key economic corridors and industrial clusters, relieving the government of the burden of funding the initial outlays for these investments,” she said in a statement by her Special Adviser, Mr. Paul Abechi, yesterday.
According to her, relevant provisions of the Companies Income Tax Act empower “Mr. President to authorise the exemption from corporate taxation, for certain companies or groups of companies, by way of the issuance of tax credits.”
The new scheme, she said, “is based on the demand for road projects by companies and other corporate sponsors, who are willing to deploy their own working capital and financial resources to fund road projects located in the major economic corridors of the country where they have significant businesses and operations.
“In terms of process and governance, prospective road projects are to be submitted to the government via the scheme’s management committee.
“After carefully considering submissions by investors, the management committee will forward the proposals, through the chairman of the committee, to Mr. President, who is empowered, pursuant to the Executive Order, to select eligible road projects.”
According to her, once approved, the eligible road projects would be published in an official gazette, and modalities would be agreed upon with the investors to accelerate the implementation of the projects, the verification of eligible project costs, as well as the issuance of tax credit certificates to the Investors.
The Executive Order also provides mechanisms for groups of investors to pool funds together to invest in road projects – directly; jointly through special purpose vehicles; or indeed, in collaboration with institutional investors such as Pension Fund Administrators, Collective Investment Schemes, Insurance Companies and Investment Banks. These measures have been adopted to enhance the ease of accessibility to the Scheme’s benefits by prospective Investors.
The minister disclosed that in the pilot phase of the scheme, six private sector players in the construction industry would execute the Executive Order 7.
They include Dangote Industries Limited, Lafarge Africa Plc, Unilever Nigeria Plc, Flour Mills of Nigeria Plc, Nigeria LNG Limited, and China Road and Bridge Corporation Nigeria Limited.
“These investors will be investing in the following 19 eligible road projects, totalling 794.4km, which have been prioritised in 11 states across each of the six geo-political zones: Construction of Ashaka-Bajoga highway in Gombe State; reconstruction of Dikwa-Gambaru Ngala road in Borno State; reconstruction of Bama-Banki road in Borno State.
“Others are rehabilitation of Sharada road in Kano State; rehabilitation of Nnamdi Azikiwe Expressway/ bypass, in Kaduna State; Reconstruction of Birnin Gwari expressway in Kaduna State; reconstruction of Birnin Gwari-Dansadau road in Kaduna State; reconstruction of Makurdi-Yandev-Gboko road in Benue State; reconstruction of Zone Roundabout-House of Assembly road in Benue State.
“The rest are reconstruction of Obajana-Kabba road in Kogi State; reconstruction of Ekuku-Idoma-Obehira road in Kogi State; construction of Adavi Eba-Ikuehi-Obeiba-Obokore road in Kogi State; rehabilitation of Lokoja-Ganaja road in Kogi State; Ofeme Community road network and bridges in Abia State; rehabilitation of Obele-Ilaro-Papalanto-Shagamu road in Ogun State; reconstruction of Apapa-Oshodi-Oworonshoki-Ojota road in Lagos State; Construction of Bodo-Bonny road and bridges across Opobo channel in Rivers State; and rehabilitation of Benin City- Asaba road in Edo State.”