Nigerian Government Allocates N127 Billion to Take Over Former NNPC-Funded Road Contracts

Abuja, Nigeria – The Federal Government has released N127 billion (approximately $81 million) to continue work on road projects previously funded by the Nigerian National Petroleum Company Limited (NNPC), following the state oil firm’s withdrawal from a tax-credit financing scheme.

Okay News reports that Minister of Works David Umahi disclosed the funding in a statement on the ministry’s website Friday. The release follows the Nigerian National Petroleum Company Limited’s exit from the road infrastructure tax-credit programme on August 1, 2025. Consequently, the Federal Ministry of Works has now assumed full responsibility for supervising and paying contractors on all affected projects.

Umahi explained that the funds are intended to sustain ongoing works and prevent further delays on critical road corridors nationwide. “The Honorable Minister disclosed that N127 billion has been released by Mr. President for the continuation of these projects, underscoring the administration’s commitment to completing inherited infrastructure initiatives,” the statement read. He added that approximately N7 trillion (approximately $4.47 billion) will still be required to complete all inherited former Nigerian National Petroleum Company Limited-funded projects across the country.

The Minister also clarified several project-specific details. He confirmed that the Abuja–Kaduna road contract was awarded to Infoquest International Limited, not Mikano International Limited as previously speculated. Additionally, he announced the extension of the Bodo–Bonny Road by 8.7 kilometres to connect with the East–West Road, a major coastal highway.

Umahi highlighted widespread vandalism affecting roads, bridges, and other infrastructure assets. He specifically cited damage along the Lagos Coastal Road corridor and flooding caused by blocked drainage channels filled with refuse. He also warned against parking heavy trucks on bridges, noting that such practices create structural stress. Some offenders have already been arrested and prosecuted, he said.

The Nigerian National Petroleum Company Limited’s withdrawal from the tax-credit road scheme created a significant financing gap for federal road projects. In August 2025, Umahi had indicated the government was considering Public-Private Partnership arrangements to complete major road projects valued at about N3 trillion. However, the latest estimate of N7 trillion represents a substantial upward revision. President Bola Tinubu has directed the ministry to explore alternative funding models and compile a list of affected projects for evaluation under the Public-Private Partnership framework, with preference given to contractors demonstrating strong financial and technical capacity.

The Federal Government has formally discontinued the use of corporate tax credits for road construction, insisting that such projects must now follow proper appropriation processes. Zacch Adedeji, Executive Chairman of the Nigeria Revenue Service, disclosed this during a joint sitting of the editorial boards of ThisDay and Arise News in February. The decision ends the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, which previously allowed major firms to fund federal road projects in exchange for tax credits. Adedeji noted that while the scheme was well-intentioned, it conflicted with constitutional and financial regulations requiring legislative approval for public funds. He also cited technical limitations of the revenue service in assessing road projects as a reason for discontinuation.

What happens next depends on the timely release of additional funds and the success of Public-Private Partnership arrangements in bridging the N7 trillion financing gap. Contractors on affected projects will be watching closely, as will commuters who depend on these critical road corridors for daily travel and commerce.