The Federal Government under President Bola Tinubu requires over N16 trillion to complete the federal road projects it inherited, according to Works Minister David Umahi.
During a press briefing in Abuja, where he outlined the achievements of the Ministry of Works under the ‘Renewed Hope Agenda,’ Mr. Umahi revealed that the administration inherited 18,932.50 kilometers of ongoing road projects across 2,064 contracts.
He explained that as of May 2023, the total value of these projects stood at N14.42 trillion. Out of this, N4.73 trillion had been certified, with N3.12 trillion already disbursed. However, a significant N1.61 trillion remains unpaid to contractors for completed works.
“The funding gap to complete these inherited projects was approximately N13 trillion as of May 2023. Given the current economic situation, including the removal of fuel subsidies and the floating of the naira, this gap is expected to exceed N16 trillion after project reviews,” Umahi stated.
He emphasized that the decision to re-evaluate these projects in light of market realities was a sound economic move by the administration, especially since some of these projects have been delayed for up to eight years. This financial assessment excludes new projects under the ‘Renewed Hope Agenda’ and the four legacy projects.
Traditionally, highway projects have been funded through annual budget allocations. However, Umahi pointed out that these allocations have consistently fallen short in addressing the country’s road infrastructure needs. To bridge the funding gap, the ministry has adopted alternative financing mechanisms such as the Presidential Infrastructure Development Fund (PIDF) and Sovereign SUKUK bonds issued by the Debt Management Office (DMO).
Additionally, funding sources include the Road Tax Credit Scheme (involving NNPCL, NLNG, Dangote, BUA, and others), multilateral loans, Public-Private Partnerships (PPP) through the Highway Development Management Initiative (HDMI), and the newly launched Renewed Hope Infrastructure Funding model.
Umahi highlighted that 82 projects were financed under the SUKUK fund, with N100 billion invested in road construction and rehabilitation in 2017. Subsequent investments included N100 billion in 2018, N162.55 billion in 2020, N210.56 billion in 2021, and N110 billion for 2,812km of road in 2022. The SUKUK provision for 2023 was approved at N250 billion.
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The minister also noted that the Federal Executive Council (FEC) approved N2.59 trillion for 65 highway projects under Phases I and II of the NNPCL Funding, covering a total of 6,358km. However, the revised total contract sum, factoring in inflation, now stands at N5.288 trillion, leaving a funding gap of N2.702 trillion.
To date, NNPCL has disbursed N840 billion, with an outstanding N1.750 trillion approved by the FEC. These projects are spread across all six geopolitical zones of Nigeria.
