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President Muhammadu Buhari has signed an executive order allowing private companies build federal roads in the country, as Abuja gradually comes around to an urgent need to leverage private capital for infrastructure development at a time when government revenue has slumped.
The new order will allow private companies such as the Dangote Group, Unilever and Lafarge Africa construct major roads across the country and be paid in form of tax credit.
“Today in Abuja I signed into law Executive Order 7 of 2019 on the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme,” Buhari said via his twitter handle, Friday.
In his three and a half year-old administration, Buhari has forged a reputation for his socialist principles.
The 76-year old’s government has preferred to go it alone in terms of infrastructure investment despite opportunities for Public Private Partnerships (PPP)s.
That has meant piling pressure on thin public revenues to invest in infrastructure, the result of which has opened the door to increased borrowings yet infrastructure development has made little progress.
In four years, it’s Nigeria’s debt stock that has doubled to N24 trillion, not the country’s stock of infrastructure.
Buhari’s change of tack to allow companies invest in federal roads holds benefits from freeing up government revenue for other purposes to addressing a yawning infrastructure deficit that has rendered Abuja uncompetitive.
The Executive Order 007 2019, signed by the president, is on Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme.
The president signed the order on Friday inside the council chamber of State House, Abuja.
Nigeria is the 11th country with the world’s worst road quality and network, according go the Global Competitive Index of 2018.
Under federal laws, public roads are constructed and maintained by the government, but poor funding has seen key roads left unattended to for years, causing car accidents.
LOLADE AKINMURELE
