Nigeria woos private investors to improve road infrastructure: In January, the Nigerian government launched a public-private investment scheme to leverage private investment for the construction and improvement of the country's roads.

Author:Unah, Linus
Position:Transport
 
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Troubled by the state of the national road network, President Muhammadu Buhari of Nigeria is trying to woo private investors. In late January, he signed an executive order which created a 10-year scheme that offers tax credits to private firms to build or refurbish roads approved by the government.

Bad roads are a major problem in Nigeria. Travelling through major interstate highways, Nigerians have to endure bumpy rides along routes marked by twists, bends, flooding, potholes and traffic backlogs resulting from the closure of sections of highway.

In 2013, a survey conducted by NOI Polls on the safety of Nigerian roads found that 82% of Nigerians believe that bad roads are the leading causes of road deaths and injuries. In May, Nigeria's Federal Road Safety Corps said 540 people died and 3,953 were injured in 950 road traffic accidents in January this year.

Around 68.3% of Nigeria's 194,200km network of roads are unreliable and in poor condition, according to the 2013 National Integrated Infrastructure Master Plan Report. The report found that only about 65,000km of the total national road network is paved in bitumen, even though 95% of passenger and freight traffic travels by road. The problem is not limited to Nigeria. According to the World Bank, "[b]etween 60,000 and 100,000 kilometres of roads are required to provide intracontinental connectivity" in Africa.

Several factors have combined to create the problem in Nigeria, including an explosion in the number of vehicles (from only 150,000 vehicles in 1983 to around 11.5m now), poor road maintenance, and inadequate investment and neglect. Some highways are today on the brink of collapse.

"Unfortunately, budgetary allocation to road projects has repeatedly proven to be insufficient to meet road infrastructure demands. In 2018, for instance, the FGN [federal government of Nigeria] allocated approximately 12% (about N344bn [$954m]) of its planned capital expenditure for the year to the construction and rehabilitation of about twenty roads nationwide," wrote KPMG tax partner Wole Obayomi in an appraisal of the new scheme in January.

Reduced taxes

"Through this scheme, companies that are willing and able to spend their own funds on constructing roads to their factories or farms, will recover their construction costs by paying reduced taxes, over a period of time," President Buhari told CEOs and governors during the ceremony for the signing of Executive Order 007, also known as the Road...

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