President Muhammadu Buhari has signed the new Executive Order 007 permitting private companies to fund the construction of major road projects in the six geo-political zones of the country.
The companies, the President said, will get tax credit and reductions in return for their effort.
The new order signed on Friday, is pursuant to the Federal Government’s “Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme,” a policy to source alternative funding for infrastructure, including road and electricity projects.
Tweeting @MBuhari, the President said: “The Executive Order 7 I signed today marks another milestone in changing the narrative that has dogged past efforts at developing critical roads infrastructure nationwide. With this Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, 19 Eligible Road Projects are to be undertaken by 6 leading manufacturing and construction firms, located in 11 States, and in each of the six Geo-political Zones.
“Through this scheme, companies that are willing and able to spend their own funds on constructing roads to their factories or farms will recover their construction costs by paying reduced taxes over a period of time. We shall ensure complete transparency in these set-offs.
“I note the prudent fiscal risk management measures which the Minister of Finance has adopted to protect the integrity of this programme.
“The Minister has submitted to me, a Fiscal Implications Report that indicates how the programme’s tax credits are to be administered in a manner that does not impair our revenue projections.
“I call on other local and international investors, as well as State Govts, to embrace this roads infrastructure development Scheme. I personally invite you to submit viable proposals for more road projects, such that, in time, the scope of this initiative will cover all 36 States.
The President admitted that reliance on budgetary allocations to fund roads developments has not yielded the desired result pointing out that revenue shortfalls have been a hindrance to funding critical projects,
“In recent years, our reliance on annual budgetary allocations to fund roads development has been disappointing, given that our budget proposals have not always been passed in an expeditious manner by the National Assembly.
“There have also been revenue shortfalls that have hampered our efforts to fully fund critical projects. In addition, at the inception of this Administration, we met a significant backlog of local contractors’ debts, which we have undertaken to clear,” he said
He noted that it the search for funding that led to the establishment of the Presidential Infrastructure Development Fund in February 2018, using the Nigeria Sovereign Investment Authority to invest in roads and power projects like the 2nd Niger Bridge, Lagos-Ibadan Expressway, East-West Road, Abuja-Kano Road, and the Mambila Hydroelectric Power Project.
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He said further, “To date, N71bn of funding of this N2.5tn initiative has come from the NSIA, the Nigeria Liquefied Natural Gas Dividend Account, the Federal Budget, as well as counterpart funds from China Exim, China Development Banks, and other development partners.
The President thanked the participating Investors and the 11 State governors for their willingness to be part of the Pilot phase of the programme.
He equally expressed confidence that members of the management committee saddled with the responsibility of implementing the scheme will be diligent and responsible in carrying out their duties.
The Committee is to be led by the Finance Minister, Zainab Ahmed as well as Minister of Power, Works and Housing, Raji Fashola.
