BUA Cement Plc looks to finance Lokoja-Benin Road at N12.0 billion via tax credit scheme

The Federal Executive Council (FEC) has approved the equalization of the Okpella stretch of the Lokoja-Benin road and others for N120 billion, which will be paid by BUA Cement Plc through the tax credit program.

Following yesterday’s FEC meeting, Bayo Onanuga, the President’s Special Advisor on Information and Strategy, revealed this on his official X handle.

“Approval was granted for the awarding of the contract for the equalization of Lokoja-Benin Road, Okpela Section, Lokoja-Benin, Dualized Auchi Section -Uromi Link Road, and Lokoja-Benin Road, Ekpoma Section on Day 2 of the FEC meeting,” he stated.

“On this route, a fuel tanker recently collapsed into high water, forcing residents to swim to rescue the tanker’s occupants. Under the tax credit plan, BUA Cement would finance the reconstruction at a cost of N120 billion.”

Additionally, Mr. Onanuga revealed the awarding of contracts for other road projects around the nation, including Ngaski-Wara in Kebbi State, Kaima-Tesse in Kwara State, Benin-Agbor, BeninByepass, and Kaima-Tesse in Kwara State. These projects are projected to cost approximately N546 billion.

According to the statement, “Contractors were awarded contracts by the council to construct roads and bridges in Kaima-Tesse, Kwara State, Benin-Agbor, BeninByepass, and Ngaski-Wara in Kebbi State. The total cost of the four contracts is N546 billion.”

In addition, a contract of N230 billion was authorized for Messrs CCECC to construct a bypass in Kano. The following 36 months were projected to be needed to finish the project.

The Tax Credit Scheme: What To Note

Former President Muhammadu Buhari created the Road Infrastructure Development and Refurbishment Tax Credit Scheme Order by Executive Order 7 of 2019, which gave the tax credit scheme its start and set a 10-year implementation period.

• The goal of the directive is to promote public-private cooperation in road building and upkeep. It lessens the financial burden on the federal government by allowing private enterprises to finance road development. These businesses will be compensated with tax credits equal to their whole road expense.
• Zacch Adedeji, the new head of FIRS, has criticized the program, calling for its discontinuation and describing it as illegal.  
• He expressed disapproval of the tax credit scheme’s operating architecture and suggested that the Ministry of Works should be the only entity in charge of awarding road contracts and overseeing payments. Additionally, he mentioned that the Ministry of Works, the CBN, and the FIRS would be meeting soon to assess the scheme’s progress and make necessary adjustments.
• Financial experts have criticized the plan in addition to the FIRS Chairman, claiming that it allows the federal government to appropriate monies (Company Income Tax, or CIT) intended for the federation without consulting state or local governments.