On 25 January 2019, President Muhammadu Buhari signed Executive Order (EO) 007 on the Road Infrastructure Refurbishment and Development Tax Credit Scheme (Scheme). The Scheme provides a platform for private companies to undertake the construction and refurbishment of eligible road infrastructure projects. The Scheme also guarantees full and timely recovery of private companies' project costs through a tax credit mechanism.


Recall that the Federal Executive Council approved the Road Trust Fund (RTF) Scheme on 26 October 2017 with the aim of increasing private sector participation in the construction and rehabilitation of Federal roads in Nigeria by incentivising investment through tax credit. (Read our newsletter on the Road Trust Fund here).

Following detailed negotiations and relevant consultations with relevant parties, the RTF Scheme has now metamorphosed into a more robust Scheme. The new Scheme appears to have addressed most of the major shortcomings of similar past initiatives such as financing, enlistment for participation, incomplete cost recovery as well as multi-agency/regulatory interface etc.

The key highlights of the EO are as follows:

  • The Scheme shall be in force for a period of 10 years from the date of commencement of the Executive Order;
  • Participants in the Scheme are entitled to recover, in addition to a single uplift, the total project cost incurred by them in the construction and refurbishment of eligible roads as tax credit against Companies Income Tax (CIT) Payable;
  • The single uplift shall be equivalent to the Monetary Policy Rate plus 2% of the total project cost and is to be utilised as a tax credit against CIT payable;
  • A Participant may carry forward its tax credit to subsequent years until it is fully utilised;
  • A Participant may also elect to sell its tax credit as a security to any interested company. If a participant is a part of a recognised group of companies, such participant may transfer its tax credit to any member of its group;
  • The Scheme is to be administered by the Road Infrastructure Refurbishment and Development Tax Credit Scheme Management Committee;
  • The eligible road infrastructure projects are contained in the Second Schedule to the EO and the list will be updated from time to time.


The introduction of the Scheme has the potential to improve road infrastructure while easing companies of their tax burden. Companies with manufacturing entities, especially those within major industrial hubs can pool funds to participate in the Scheme for the benefit of their companies and the overall growth of the economy, albeit in the long run.

Notwithstanding the foregoing, the success of the Scheme is hinged on the ability of the government to build the right level of trust with the private sector. Companies, particularly those with huge balance sheets, who wish to take advantage of the Scheme should consult their advisers and conduct cost-benefit analyses to ensure that relevant incentives are explored after relevant due diligence.

It is expected that the government would issue subsidiary Regulations to provide additional clarity on issues arising from the application of the EO. We will also issue further details in subsequent publications.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.