Nigeria faces a critical infrastructure deficit projected at over $3 trillion in the next 26 years1 with an average annual budget of approximately $29 billion in the last 10 years, of which figure only about 30% was allocated to capital expenditure. To combat these shortfalls, the Federal Government of Nigeria has incentivised private sector participation in the provision and maintenance of key infrastructures across the country.

On the 25th of January, 2019, President Muhammadu Buhari relying on the powers conferred on him by Section 23(2) of the Companies Income Tax signed Executive Order No. 007 on "Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme 2019".2 The Order establishes a Ten (10) year scheme known as the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme ("the Scheme") which seeks to encourage Public-Private Partnership intervention in the construction/refurbishment of road infrastructure projects in Nigeria.3 The private participants of the Scheme provide the funds for the construction/refurbishment projects and in exchange, the participants are entitled to recoup the funds provided as a credit against the Companies Income Tax to be paid.

The various tax credit schemes created are projected to enable companies that are willing and able to spend their funds on the construction, provision and maintenance of various key infrastructures across the country, recover their full construction costs as tax credits, over a period.


  1. The Scheme was established against the background that the Federal Government of Nigeria (FGN) must provide adequate public infrastructure facilities for all citizens and encourage the free mobility of people, goods and services throughout the Federation, to promote national integration and protect the rights of citizens to engage in legitimate economic activities concerned with the production, distribution and exchange of wealth, goods and services.
  2. It is predicated on the recognition that it is the responsibility of the FGN to harness Nigeria's resources, promote national prosperity and an efficient, dynamic and self-reliant economy, and manage and operate the Roads Transportation Sector, as well as the major sectors of the economy.
  3. It stems out from the commitment of the FGN to ensure that its Roads Transportation Infrastructure Policies are channelled at the promotion of a planned and balanced economic development,in such a manner that the material resources of the nation are harnessed and distributed as best as possible to serve the common good.
  4. To guarantee Participants timely and full recovery of funds provided for the construction or repair of eligible road infrastructure projects in the manner prescribed in the Executive Order.


The Scheme focuses on leveraging private sector funding for the construction and refurbishment of eligible road infrastructure projects. The eligible roads are to be approved by the President, on the recommendation of the Minister of Finance and published in the Official Gazette of the Federal Republic of Nigeria. The following entities4 may participate in the Scheme: a company or corporation, other than a corporation sole, established under the Companies and Allied Matters Act, 2020 (CAMA); companies operating through a special purpose vehicle (SPV) registered by a fund manager duly registered with the Securities and Exchange Commission ("the SEC") and set up solely as an infrastructure fund; and institutional investors such as pension fund administrators, collective investment schemes and investment banks.


To be qualified to benefit from the scheme, a private company must satisfy the following requirements:

  1. Prospective participants must register and ensure that its certification by the Committee as a Participant or representative of Participant of the scheme is confirmed.
  2. Prospective participants must provide evidence of certification of the Project Cost by the Committee.
  3. Prospective participants must provide evidence that the project is economically viable, cost-efficient and can be completed promptly (within 12 to 48 months).
  4. Prospective participants must provide approval of the Project Cost and completion timeline bid by the Committee.
  5. Copy of issued Contract award letter.


The following are some of the reasons why Companies should actively pursue the Infrastructure Tax Credit Scheme:

  1. Participants in the Scheme shall be entitled to Tax Credits against their future Companies Income Tax to the tune of the total project cost incurred in the construction or refurbishment of the eligible road. Recovery of the approved total project costs shall be subject to the utilisation of a maximum annual tax credit of 50% of the total accessed CIT for each year of assessment. In addition, the Participant shall also be entitled to a single non-taxable uplift at the prevailing Central Bank of Nigeria Monetary Policy Rate plus 2% of the Project Cost. Both are jointly referred to as "Road Infrastructure Tax Credit (RITC)".
  2. Participants that engage in the construction or refurbishment of roads in areas designated by the President as "Economically Disadvantaged Areas" are entitled to utilise an annual tax credit that covers up to 100% of the total accessed CIT for each year of assessment.
  3. Any unutilised credit within the year of assessment can be carried forward by a Participant to subsequent tax years until the credit is fully utilised.
  4. The Road Infrastructure Tax Credit can be transferred in part or as a whole by a Participant to a new beneficiary upon notification of transfer to the Committee. The Committee is mandated upon notification to effect the transfer in the Records and immediately issue a new Road Infrastructure Tax Credit (RITC) to the Beneficiary of the transfer.
  5. The Executive Order provides that the tax credit qualifies as an asset in the Participant's or Beneficiary's financial records.
  6. The tax credit is tradable on any stock exchange in which it is registered. However, the Participant intending to trade the tax credit shall do so only with the consent and approval of the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme Management Committee ("Committee").
  7. Companies located more than twenty kilometres from government facilities providing electricity, water, or tarred roads can write the Capital Expenditure (CapEX) portion as follows; 100% where there are no facilities, 50% where there is no electricity, 30% where there is no water and 15% where there are no tarred roads. This is similar to the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme but specific to the rural areas.


Some of the most prominent participants of the Infrastructure Tax Credit Scheme include:

  1. Dangote Cement Plc: A tax credit certificate worth N22.3 billion was awarded to Dangote to construct the Apapa-Oworonshoki-Ojota road in Lagos and the Lokoja-Obajana-Kabba road connecting Kogi and Kwara States
  2. MTN: 110km Enugu-Onitsha road in Anambra State in exchange for tax credits.
  3. Transcorp Group: Oyinbo-Izuoma-Mirinwayi-Oklama-Afam Road
  4. Access Bank: Oniru axis of VI-Lekki circulation road in Lagos State
  5. GZI Industries: Umueme village road, Abia State.
  6. Mainstreet Energy: Malando-Garin Baka-Ngwaski Road
  7. The BUA: Bode-Saadu-Lafiagi road; Eyinkorin road and bridge
  8. NLNG: Bodo-Bonny bridges and road
  9. The Dangote Group: Obajana-Kabba road


Although the introduction of the Scheme is an innovative plan aimed at funding the Government's infrastructure development initiative, it is anticipated that its implementation may present challenges, which, unless addressed, could limit the benefits accruing to Participants. Some of these challenges include gaps in the Executive Order which might limit the successful execution of the Scheme. The following queries summarise some of the identified gaps:

  • What happens to unutilised RITC after the ten-year duration of the Scheme?
  • Would the transfer of unutilised RITC as employed in the Scheme be extended to other tax assets such as unutilised withholding tax credits, unrelieved tax losses, or unutilised capital allowances?
  • Are there potential restrictions on claimable tax credits?
  • What is the impact of the Scheme on roads managed by state and local governments?
  • What are the strategies developed to mitigate bureaucracy and potential administrative bottlenecks?
  • What are the criteria for selecting eligible roads and Participants that would construct or refurbish eligible roads?
  • Is borrowing cost eligible as part of project cost? It appears the uplift intends to compensate for borrowing cost or time value of money spent but it does not go far enough as it is a single uplift while respective tax credit claim could take several years.
  • Are eligible roads limited only to federal roads given that states and local governments are entitled to a share of CIT revenue?
  • The absence of comprehensive dispute resolution mechanisms for the Scheme. The nature of the Scheme is one in which disputes on issues such as; valuation of project costs, adjudged tax payable, and policy conflicts may often arise.

The challenges identified among others would need to be addressed and clarified by the committee, stakeholders and Presidency for the effective application and success of the scheme.

Nonetheless, the Scheme presents an opportunity for companies, especially manufacturing companies, to channel funds towards the construction, repair and maintenance of key infrastructure which are most critical to the movement of inventory and products, shortening supply lead times, optimising the manufacturing supply chain and ultimately enjoying the tax incentive for the cost incurred as specified under the Scheme.


The Infrastructure Tax Credit Scheme is a commendable initiative. The success of the Scheme will depend on its attractiveness to the targeted private sector participants and whether the government can win their trust and provide assurances that the Scheme will not be prone to unexpected policy changes either by current or subsequent administrations. Furthermore, to ensure that the lofty aspirations expressed in the scheme become a reality it is important for both the FGN and companies that will benefit from the Order to seek appropriate guidance from seasoned experts with in-depth experience in financial, legal and commercial issues for PPP based Infrastructure Developments to identify and manage project risks that are associated with such infrastructures.


1. According to the data made available by the Senior Director, AfDB Nigeria, at the Africa Investment Forum (AIF) Road show in Abuja 2018.

2. Preamble to the Executive Order No. 007 of 2019.

3. Paragraph 1(3) of Presidential Executive Order, No. 007, 2019.

4. Paragraph 5 of the Order

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