The Federal Government requires more than ₦16 trillion to complete road projects inherited from previous administrations, according to David Umahi, Nigeria’s Minister of Works. Umahi revealed this during a briefing on the achievements of the ministry under President Bola Tinubu’s Renewed Hope Agenda.
As of May 2023, the value of all ongoing road projects was ₦14.42 trillion. Umahi explained that the total amount certified for these projects was ₦4.73 trillion, but only ₦3.12 trillion has been paid. The outstanding amount owed to contractors is ₦1.61 trillion.
The minister noted that the funding gap to complete these projects was approximately ₦13 trillion in May 2023 and is expected to exceed ₦16 trillion when updated for current market conditions. This increase is attributed to the removal of fuel subsidies and the floating of the naira.
Umahi mentioned that previous methods of funding, reliant on annual budgetary provisions, have proven inadequate. Consequently, the ministry has explored alternative funding mechanisms, including the Presidential Infrastructure Development Fund (PIDF), Sovereign SUKUK bonds, and the Road Tax Credit Scheme involving major corporations like NNPCL, NLNG, and Dangote.
He also highlighted other funding sources, such as multilateral loans, Public Private Partnerships (PPP), and the Renewed Hope Infrastructure Funding model. Under the SUKUK fund, ₦100 billion was invested in 2017, with further investments in subsequent years totaling over ₦800 billion.
For the projects under Phases I and II of the NNPCL Funding, the Federal Executive Council (FEC) approved ₦2.59 trillion, covering 6,358 km. However, the funding gap due to inflation is ₦2.702 trillion.
Umahi emphasized the introduction of the Highway Development and Management Initiative (HDMI) to attract private investment in road infrastructure. This initiative aims to enhance sustainability, accountability, and profitability in road development and management.
The current administration’s Renewed Hope Agenda includes four major highway projects: the Lagos-Calabar Coastal Road Corridor (750 km), Sokoto-Badagry Road (1,068 km), Calabar-Abuja Superhighway Project (482 km), and Akwanga-Jos-Bauchi-Gombe Road (439 km). These projects are intended to improve Nigeria’s road network and boost socio-economic development across the country.