FEDERAL GOVT’S EXECUTIVE ORDER 007; A RELIEF FOR TRUCK USERS

Let me first say complement of the season to my esteem readers, interestingly this is my first article for year 2019.

This new year started on a good note with the signing of the Executive Order 007 of 2019 on the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme by President Muhammadu Buhari. The aim of the executive order is to provide the much-needed private capital for infrastructure development in the country.

The interesting thing about the scheme is that it will not only incentivise private sector investment in Nigerian roads across key economic corridors and industrial clusters, relieving the government of the burden of funding the initial outlays for these road investments, it will also serve as the key to unlocking the potentials within the haulage industry.

The genius in this executive order 007 is the fact that companies or group of companies will be exempted from corporate taxation, by way of the issuance of tax credits. The new scheme is based on the demand for road projects by companies and other corporate sponsors, who are willing to deploy their own working capital and financial resources to fund road projects located in the major economic corridors of the country where they have significant businesses and operations.

For us in the haulage industry it is a good news which will have a multiplier effect on the seamless movement of goods across the various corridors in Nigeria. It will also reduce trip time significantly, it will reduce the cost of fueling of trucks and reduce rate of accidents due to bad roads. More significantly is the fact that the companies saddled with these projects will ensure that the roads are constructed to standard with a tonnage carrying capacity that is “heavy duty truck worthy” and to last long-term due to the cost implication if they fail to, and the maintenance cost implication if done in a sub-standard manner.

The pilot phase of the scheme will involve six private sector players in the construction industry . They include Dangote Industries Limited, Lafarge Africa Plc, Unilever Nigeria Plc, Flour Mills of Nigeria Plc, Nigeria LNG Limited, and China Road and Bridge Corporation Nigeria Limited. These investors will be investing in the following 19 eligible road projects, totalling 794.4km, which have been prioritised in 11 states across each of the six geo-political zones: Construction of Ashaka-Bajoga highway in Gombe State; reconstruction of Dikwa-Gambaru Ngala road in Borno State; reconstruction of Bama-Banki road in Borno State. Others are rehabilitation of Sharada road in Kano State; rehabilitation of Nnamdi Azikiwe Expressway/ bypass, in Kaduna State; Reconstruction of Birnin Gwari expressway in Kaduna State; reconstruction of Birnin Gwari-Dansadau road in Kaduna State; reconstruction of Makurdi-Yandev-Gboko road in Benue State; reconstruction of Zone Roundabout-House of Assembly road in Benue State. The rest are reconstruction of Obajana-Kabba road in Kogi State; reconstruction of Ekuku-Idoma-Obehira road in Kogi State; construction of Adavi Eba-Ikuehi-Obeiba-Obokore road in Kogi State; rehabilitation of Lokoja -Ganaja road in Kogi State; Ofeme Community road network and bridges in Abia State; rehabilitation of Obele-Ilaro-Papalanto-Shagamu road in Ogun State; reconstruction of Apapa-Oshodi-Oworonshoki-Ojota road in Lagos State; Construction of Bodo-Bonny road and bridges across Opobo channel in Rivers State; and rehabilitation of Benin City- Asaba road in Edo State.”

In conclusion, my advice to state governors (mostly especially states with large industrial estates/corridors like Ogun State) is to look into granting the same executive orders at the state level for companies to begin to build roads and bridges for a rapid infrastructural development across all the state. With such executive order Nigeria will almost have achieved an infrastructural equilibrium in less than one and half decades.

Thanks for reading and kindly look forward to more articles this year 2019. Happy New Year!