The myth surrounding the development of Nigeria’s federal roads was last week broken with the Executive Order 007 of 2019. The Order titled Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, will allow for the construction of major roads across the country by private companies. This in turn will be paid for by the government in the form of tax credit to the companies. Already, six companies including the Dangote Group, have been selected to construct 19 federal roads in the test phase of the new scheme. Prior to this order, carrying out any form of construction work on federal roads without the express permission of the Federal Government was illegal.
Nigeria has 184 federal roads, which carries over 80 percent of vehicular traffic, and by extension, accounts for 80 percent of economic activities. Majority of these roads are in a state of disrepair, as a 2018 Global Competitiveness Index report has shown. The report listed Nigeria as the 11th country in the world with the worst road quality and network. Meanwhile, every year, billions are allocated in the annual budget for the construction and maintenance of these roads with nearly nothing to show for it. Between 2017 and 2018, over N3.3 trillion was reportedly spent on the execution of road projects. In 2017, N555.99 billion was allocated to the Ministry of Power, Works and Housing. N295 billion was reportedly set aside out of that amount, for key capital projects, which included funds for construction, expansion and maintenance. Last year, the Director of Highways, Planning and Development, Federal Ministry of Power, Works and Housing, Chukwunwike Uzo, said road projects worth N2.8 trillion, were being executed across the country.
Yet reports from road travelers paint a different picture; federal roads are in a pitiable and deplorable state, daily endangering lives and goods in transit. It was estimated in 2017 that Nigeria lost N2.9 trillion in assets as a result of the deplorable conditions of its roads.
As it concerns the ports in Lagos, the Apapa-Wharf road and Oshodi-Apapa expressway, both federal roads linking the seaports, had become national embarrassment until a public-private partnership between AG Dangote Construction Company and other stakeholders saved the former. In fact, some federal roads had become the biblical bottomless pit, continuously gulping funds.
Several state governors, frustrated by the condition of federal roads in their territories, took matters into their hands and carried out intervention works, amounting to over N600 billion. As at 2018, this sum remains unpaid bt the Federal Government.
The passage of the Executive Order 007 2019 is a tacit admittance by the Federal Government that Nigeria needs a public-private-partnership approach to tackle its huge infrastructure deficit. Private establishments, in addition to the tax credit, will now freely develop road infrastructure that will promote the expansion of economic activities in the country. With the way now made clear for PPP, the government will do well to shift its focus t the regulatory aspect of the partnership and the streamlining of bureaucratic processes capable of discouraging private investment. It is imperative that Nigeria gets the test phase of this Executive Order right, as its success would determine the future of roads in the country.