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FG Plans Tax Relief For Road Concessioners – Fashola



As part of efforts to improve road construction in the country, the federal government said it would give tax relief to private sectors that invest in road construction in the country.

Already, the government has approved pending applications from Dangote group to commence work on 42.9 km of the Obajana – Kabba road, and the five-year limit on that tax order to a ten-year period to sustain private investment in road infrastructure, because it is a long-term asset.

Speaking at the Road Construction Summit 2017 organised by Lafarge and Business Day at the weekend in Lagos, the Minister of Power, Works and Housing, Babatunde Fashola said that there are a lot of possibilities that lie ahead when private capital comes into road construction under the tax relief order as proposed to be amended and complements government spending.

According to him, the government has just concluded an agreement using the tax incentive order to hand over the Apapa area comprising Creek Road, Liverpool Road, Marine Beach to Mile 2, Oshodi, Oworonshoki to the Lagos end of the Toll Gate on the Ibadan Expressway to Dangote Group.

Also, he said the government has signed an agreement with NLNG to construct the Bodo-Bonny Bridge at the cost of N120.6 billion with NLNG and federal government sharing the cost.

“We have identified 28 toll plazas out of the old toll plazas, on roads where construction work is currently going on, at which we propose to restore toll plazas. We have also concluded traffic surveys on 51 major highways and now have current traffic data on these roads and we can project vehicular traffic movement for tolling and concession purposes,” Fashola said.

Going by the recent second quarter GDP report, the Minister said, “With respect to construction and related activities, GDP in the sector had been negative since Q2 2015, but turned positive for the first time in Q1 2017 growing by 0.15 per cent and continued to positive growth into Q2 2017 by growing by 0.13 per cent. The reversal in construction has to do with civil works especially due to FGN capital expenditure.”

Chairman, Lafarge Africa, Mr. Mobolaji Balogun noted that with the federal and respective state governments grappling with dwindling resources, it has become crucial that the ecosystem of public and private sector players brainstorm on issues of funding, partnerships, design, and quality of roads in Nigeria, as for sure government can no longer do it alone.


Meanwhile, Fashola has stated that the improvement in the 2016 budget and diversification of the economy are two key strategies of the Buhari administration that have led to economic growth Nigeria’s eventual exit from recession.

Delivering the keynote address at the Lafarge, BusinessDay Road Construction Summit recently in Lagos titled “Economics of Innovative Solution to Road Construction in Nigeria”, the minister pointed out  that the 2016 budget came to change the game because it focused more on infrastructure spending rather than overhead which according to him was gulping the larger part of yet inadequate budgets of the past.

“In the final analysis of the 2016 budget, N1.2 trillion was spent on capital expenditure across all ministries, departments and agencies, out of which N198.300 billion was spent in the Works Sector on roads and bridges.

“This is what induced the recovery of growth and the exit from recession,” Fashola explained.

Pointing out that the report of the National Bureau of Statistics (NBS)  shows that infrastructure spending in other  sectors as mining,  agriculture, etc., has clearly improved the GDP and impacted the economic life of the people  through generation of employment.

“Infrastructure spending drives the real economy, stimulates production and industrial activity which employs people and includes them. This is the economics of road construction.

“So, the growth and exit from recession means that hope has been restored, and if we persevere and persist, the number of people who recovered lost jobs and those who will find new jobs, will gradually increase.

“The process to continue this has commenced with the provision of funding under the 2017 budget in the sum of N90 billion out of which N47.169Billion has been paid to 62 contractors working on 149 projects to continue works on roads and bridges and keep people at work and sustain production in works,” the Minister explained further.