Dangote receives a tax credit of N309.9 billion for constructing a 275-kilometer road

The Federal Executive Council has approved the awarding of a contract to Dangote Industries for the construction of five roads totaling 274.9 kilometers at a cost of N309.9 billion, which will be paid to the company as a tax credit.

This was stated by Babatunde Fashola, Minister of Works and Housing, while briefing state house correspondents at the conclusion of the FEC meeting presided over by President Muhammadu Buhari on Wednesday.

The road contract, which was the second approved by the council for the ministry, will be built on concrete and will be the largest of its kind in the country, according to Fashola.

“The ministry’s second memorandum was for the construction or reconstruction, as the case may be, of five road projects in Dangote Industries Limited’s favor, totaling 274.9 kilometers of federal roads, under the Federal Government Roads Infrastructure Tax Credit policy,” he said.

“The Dangote Industries will advance N309,917,717,251.35 as a tax credit for those five roads, totaling 274.9 kilometers.

“The roads are Bama to Banki in Borno State for N51.016 billion and 49.153 kilometers; Dikwa to Gamboru-Ngala in Borno State for N55.504 billion and 49.577 kilometers; and the Nnamdi Azikiwe Road, popularly known as Western Bypass in Kaduna for N55.504 billion. 21.477 kilometers between Command Junction and Kawu, costing N37.560 billion

“Others include the N85.838 billion deep seaport access road sections 1 and 3 in Lagos State, through Epe to Shagamu Expressway, 54.24 kilometers that connects Lagos and Ogun states, and the N79.996 billion Obele/Ilaro/Papalanto to Shagamu Road, 100 kilometers in Ogun State.

“This memorandum was considered and approved by Council to assist in the construction of 274 kilometers of concrete roads. As a result, this will be the largest single award of concrete roads ever made by the Nigerian government.”

The award of the contract to Dangote Group, according to Fashola, was in line with funding options.

“First and foremost, the award is consistent with our multiple funding options, which include private sector engagement,” he said.

“Secondly, the tax credit initiative existed prior to this administration but was not used. As a result, this administration has revised it, expanded it, and used it to build roads such as the Apapa Wharf Road, the Oworonsoki to Apapa, through Oshodi Road, all built by the same Dangote Group.”
“The Dangote Group still owns the Obajana-Kabba Road. The NLNG approved the Bodo-Bonny bridges and road, which Council approved last week.

“Many other companies that are being evaluated expressed interest as well. As a result, it isn’t unique to Dangote. So he’s the one who applied, and we’ve been going through this. So this is the next set of roads they’ll be working on.

“They invest their money and then net it off instead of paying their taxes when they are due. That is the situation. This isn’t concessioning; it’s tax credit policy; don’t confuse the two.

“According to the policy, anyone who wants to invest personal resources, including individuals, in any infrastructure that the general public will have access to can do so under certain conditions, including applying to the Ministry of Works.

“The ministry evaluates, and the Minister of Finance chairs a tax credit committee because they keep track of how much tax relief is given out in a given year so that the government’s revenue performance isn’t harmed once the investment is made.

“So, the committee approves and says, ‘Go ahead, this is good, this is how much tax we’ll allow per year,’ and if the company is satisfied, we go to BPP and then FEC.”

The works ministry also received approval to revise the contract total cost for the construction of Michael Imoudu/Ganmo/Afon Junction Road in Ilorin, Kwara State.

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“According to the policy, anyone who wants to invest personal resources, including individuals, in any infrastructure that the general public will have access to can do so under certain conditions, including applying to the Ministry of Works.

“The ministry evaluates, and the Minister of Finance chairs a tax credit committee because they keep track of how much tax relief is given out in a given year so that the government’s revenue performance isn’t harmed once the investment is made.

“So, the committee approves and says, ‘Go ahead, this is good, this is how much tax we’ll allow per year,’ and if the company is satisfied, we go to BPP and then FEC.”

The works ministry also received approval to revise the contract total cost for the construction of Michael Imoudu/Ganmo/Afon Junction Road in Ilorin, Kwara State.