BUA Cement Plc to Fund Lokoja-Benin Road with N120 Billion Through Tax Credit Scheme

The Federal Executive Council (FEC) has given its nod to the equalisation of the Okpella section of the Lokoja-Benin road and other critical routes, amounting to N120 billion, to be financed by BUA Cement Plc under the tax credit scheme.

Bayo Onanuga, the Special Adviser to the President on information and strategy, shared this update via his official X handle following the FEC meeting.

He elaborated, “During the second day of the FEC meeting, approval was granted for the contract award for the equalisation of the Lokoja-Benin Road, Okpela Section, Lokoja-Benin, Dualised Auchi Section -Uromi Link Road, and Lokoja-Benin Road, Ekpoma Section.” This decision comes in response to recent incidents, such as a fuel tanker mishap, underscoring the urgency of road reconstruction.

Furthermore, Mr. Onanuga revealed additional contracts for various road projects nationwide, including Kaima-Tesse in Kwara State, Benin-Agbor, Benin Bypass, and Ngaski-Wara in Kebbi State, with an estimated cost of N546 billion.

In a separate development, FEC sanctioned a N230 billion contract to Messrs CCECC for the construction of a bypass in Kano, slated for completion within the next 36 months.

The Tax Credit Scheme, initiated by former President Muhammadu Buhari through Executive Order 7 of 2019, aims to promote public-private partnerships for road infrastructure development and maintenance over a 10-year period. Under this scheme, private entities finance road projects, alleviating the financial burden on the Federal Government, and in return, receive tax credits equivalent to their expenditure on these projects.

However, the scheme has encountered criticism from the new FIRS boss, Zacch Adedeji, who deemed it unlawful and advocated for its termination. Adedeji highlighted flaws in its operational framework and proposed centralizing the responsibility for awarding road contracts and managing payments under the Ministry of Works. A forthcoming meeting involving FIRS, CBN, and the Ministry of Works is slated to reassess the scheme’s efficacy.

Critics, including financial experts, have raised concerns that the scheme allows the federal government to appropriate funds (Company Income Tax CIT) meant for the federation without input from other levels of government (state and local).