Umahi says ministry now responsible for supervision and payments as N7tn funding gap looms after tax-credit scheme exit……
The Federal Government has released N127 billion to sustain ongoing federal road projects previously financed by the Nigerian National Petroleum Company Limited (NNPCL), following the company’s withdrawal from the tax-credit funding arrangement.
Minister of Works, David Umahi, disclosed the development in a statement published on the official website of the Federal Ministry of Works on Friday, confirming that the ministry has now assumed full responsibility for both supervision and payment of the affected projects.
NNPCL formally exited the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme effective August 1, 2025, leaving a significant financing gap for projects initiated under the framework.
N127bn to Prevent Project Delays
According to Umahi, the N127 billion release is aimed at ensuring continuity on critical road corridors and preventing further construction delays.
“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 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 statement read.
He added that President Bola Tinubu approved the N127 billion disbursement as part of the administration’s commitment to completing inherited infrastructure projects across the country.
Despite the fresh funding injection, Umahi disclosed that approximately N7 trillion will still be required to complete all ongoing former NNPCL-backed projects nationwide, a figure significantly higher than earlier estimates.
Project Updates and Infrastructure Concerns
The ministry also used the update to clarify details surrounding some high-profile road contracts.
Umahi confirmed that the Abuja–Kaduna road contract was awarded to Infoquest International Limited, not Mikano International Limited, correcting public misconceptions about the project.
He further raised concerns over rising cases of vandalism affecting federal infrastructure, including damage reported along the Lagos Coastal Road corridor. The minister cited flooding linked to blocked drainage systems filled with refuse and warned against the practice of parking heavy-duty trucks on bridges, which he said causes structural stress.
According to him, some offenders have already been arrested and prosecuted.
In the Niger Delta, Umahi announced the extension of the Bodo–Bonny Road project by 8.7 kilometres to connect it to the East–West Road, enhancing regional connectivity.
Financing Gap After Tax-Credit Exit
The funding challenge emerged after NNPCL’s decision to discontinue direct financing of road projects under the tax-credit scheme.
In August 2025, Umahi had indicated that the government was exploring Public-Private Partnership (PPP) models to complete major road projects initially valued at around N3 trillion. However, the latest assessment places the total cost of the inherited projects at roughly N7 trillion more than double the earlier estimate.
President Tinubu subsequently directed the Ministry of Works to explore alternative funding mechanisms and compile a comprehensive list of affected projects for possible evaluation under PPP arrangements. Priority, the minister said, would be given to contractors with strong financial and technical capacity to guarantee timely execution.
End of Corporate Tax Credit Model
The Federal Government has since formally discontinued the use of corporate tax credits for road construction, insisting that such projects must follow constitutional appropriation processes.
Executive Chairman of the Nigeria Revenue Service, Zacch Adedeji, announced the policy shift during a joint session with the editorial boards of ThisDay and Arise News in February.
He explained that while the tax-credit scheme was introduced with good intentions, it conflicted with constitutional and public finance regulations. He also cited technical limitations within the revenue service in assessing large-scale road projects.
The decision effectively ends the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, under which major companies previously funded federal roads in exchange for tax credits.
With NNPCL’s withdrawal and the new funding structure in place, the Ministry of Works now faces the task of bridging a multi-trillion-naira financing gap while ensuring that critical national road projects do not stall.
