The Federal Government has released N127 billion to continue inherited road projects previously funded by the Nigerian National Petroleum Company Limited (NNPCL).
The disclosure was made by the Minister of Works, David Umahi, according to a statement on the Federal Ministry of Works website on Friday.
The release follows NNPCL’s withdrawal from the tax-credit road scheme effective August 1, 2025, with the Ministry now officially taking over supervision and payment responsibilities for affected projects.
What they are saying
Minister Umahi explained that the release of the funds is intended to sustain ongoing works and prevent further delays on critical road corridors.
He emphasized that the Federal Ministry of Works has taken over both supervision and payment responsibilities for projects previously funded by NNPCL.
- “Addressing the status of former NNPCL-funded road projects initiated under Executive Order 007 (April–May 2023), the Minister clarified that the Nigerian National Petroleum Company Limited (NNPCL) will no longer directly pay contractors for these projects. The Federal Ministry of Works has officially taken over both project supervision and payment responsibilities, in line with new federal directives.”
- “The Honorable Minister disclosed that N127 billion has been released by Mr. President for the continuation of these projects, underscoring the administration’s commitment to completing inherited infrastructure initiatives.”
He added that NNPCL would no longer directly fund contractors under the previous arrangement, noting that about N7 trillion will still be required to complete all inherited former NNPCL-funded projects nationwide.
More insights
The Ministry also clarified specifics about ongoing projects and operational challenges.
- The Abuja–Kaduna road contract was awarded to Infoquest International Limited, not Mikano International Limited.
- Minister Umahi highlighted widespread vandalism affecting roads, bridges, and other infrastructure, citing damage along the Lagos Coastal Road corridor and flooding caused by blocked drainage channels filled with refuse.
- He warned that parking heavy trucks on bridges creates structural stress, noting that some offenders have been arrested and prosecuted.
He also announced the extension of the Bodo–Bonny Road by 8.7 kilometres to link the East–West Road.
Backstory
The NNPCL’s withdrawal from the tax-credit road scheme created a financing gap for federal road projects.
- However, in his latest update, Umahi noted that the total cost of ongoing former NNPCL-funded projects is actually about N7 trillion, highlighting a significant upward revision from the earlier estimate.
- The NNPCL stopped further funding under the scheme effective August 1, 2025, leaving this N7 trillion gap for the Federal Ministry of Works to manage.
- President Bola Ahmed Tinubu directed the Ministry to explore alternative funding models and compile a list of affected road projects for evaluation under the PPP framework.
Preference will be given to contractors with strong financial and technical capacity to ensure timely completion.
What you should know
The Federal Government has discontinued the use of corporate tax credits to fund road construction, insisting that such projects must go through proper appropriation processes.
- Mr. Zacch Adedeji, Executive Chairman of the Nigeria Revenue Service (NRS), disclosed this during a joint sitting of the editorial boards of ThisDay and Arise News in February.
- The decision ends the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, which previously allowed major firms to fund federal road projects using tax credits.
- Mr. Adedeji noted that while the scheme was well-intentioned, it conflicted with constitutional and financial regulations, emphasizing that public funds require legislative approval.
He also cited technical limitations of the NRS in assessing road projects as a reason for discontinuation.
