November 30, 2021

Re: Equity Gaps In NNPC’s N621.2bn Tax-Credit Road Projects

3 min read

By Adewole Kehinde

There seems to be a sponsored Editorial against the timely imitative of the NNPC Limited in reconstructing 21 federal roads at the cost of N621.2bn. 

Last week, the Guardian Newspaper Editorial focus was on the road fixing with a screaming titled “The NNPC N621 billion roads-fixing mandate.”

On Tuesday, 16th November 2021, the Vanguard Newspaper also focused its Editorial on the road reconstruction with the title “Equity Gaps In NNPC’s N621.2bn Tax-Credit Road Projects”

I will like to respond to the questions raised by the Editorial starting with the equity issue in the distribution of the 21 roads. Yes, fourteen of these are in the North, while seven are in the South. I strongly believe that the Editorial ignorantly neglect to compare the cost implication of the Road according to the Zones.

From my rough calculation, it will cost about N310million to fix a kilometer of road in the North-Central; which has mostly plain dry land while in the South-South, it will cost about N1.9billion to fix a kilometer of road; which is mostly Riverine,  so the South-South is even benefitting more when you look at the breakdown of the cost implication.

The Vanguard Editorial should know that the South-South 81.9km Roads that cost N172,027,912,645.98 is bigger than the three region namely; North East, North West and South East having combination about N122billion.

So the claim by Vanguard Editorial that the NNPC derives all its products and money from the South but offers it mere pittances in the sharing of its first pre-tax road scheme is completely baseless.

On how these projects were costed, the Vanguard Editorial should know all the 21 Roads have been budgeted for by the Federal Ministry Works and Housing but awaiting funding, I can say bodily that the National Assembly played major role in arriving at the cost during budget defence and over site visits. The tax NNPC Limited is using to reconstruct the roads have properly vetted before approval by the Federal Inland Revenue Services, FIRS.

Since coming on board as the 19th Group Managing Director of the NNPC, Mallam Mele Kyari has continued to reiterate his commitment to conducting the business and operations of the Corporation in a transparent manner, with a view to placing it on the path of profitability.

Kyari had taken calculated steps to ensure more openness in the activities of the Corporation and the Transparency, Accountability and Performance Excellence (TAPE) agenda has brought about greater transparency and accountability in NNPC’s management of Nigerian oil and gas revenues to date.

Therefore, the “NNPC package” is never too “secretive and one-sided” as reported by the Vanguard Editorial.

It is on record that the Buhari administration is achieving lots in road rehabilitation and reconstruction through the establishment of the Presidential Infrastructure Development Fund (PIDF), in 2018, to fast-track the completion of critical infrastructure projects. In addition, President Buhari, in January 2019, signed Executive Order 7 (the “Companies Income Tax Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme) which is aimed at attracting PPP financing for road construction across Nigeria. It was through this laudable scheme that infrastructural funding is sourced from the Sukuk Bond.

The Administration identified and marked out 63 roads across the country, including 44 Federal Highways. These roads which linked up trade, commerce, port, and agricultural centres across the six geopolitical zones of the country were classified under Critical Economic Routes and Agricultural Routes, and accorded budgetary priority.

The roads include the Benin-Ofosu-Ore Ajebandele-Shagamu Road, Sapele-Ewu Road Sections 1&11, Second Niger Bridge, Onitsha-Enugu Expressway (Amansea-Enugu State Border), Yenegoa Road Junction-Kolo-Otueke-Bayelsa Palm and Bodo-Bonny Road with Bridge.

Others are the Odukpani-Itu-(Spur Ididep-Itam)-Ikot Ekpene Federal Highway Sections 1&11; Ikom Bridge; Enugu-Port Harcourt Dual Carriageway Sections i-iv; Calabar-Ugep-Katsina-Ala Road; Benin-Ofosu-Ore-Ajebandele-Shagamu Road, Onitsha-Enugu Road (Section 1&11), Enugu-Port Harcourt Road (Sections i-iv), Calabar-Odukpani-Itu Road (Section 1), Calabar-Ugep-Katsina-Ala Road (Sections 1&11), Alesi-Ugup (Iyamoyung-Ugup) Road, Ogoja(Mbok Junction) Abuochichie Road among others, were also among those listed.

There is no doubt the completion of the reconstruction of these roads will heighten the tempo of National Economic Recovery and achieve one of the cardinal objectives of the Muhammadu Buhari Administration.

From all indications, the South-South geo-political zone emerged the second highest beneficiary of the NNPC Road Infrastructure Development and Refurbishment project with the sum of N172.02bn for a total of 81.9 kilometres of road.

Adewole Kehinde is a Public Affairs Analyst based in Abuja. He can be reached via 08166240846, 08123608662. kennyadewole@gmail.com

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