FG Reserves NNPCL Road Contracts Below ₦20 Billion for Local Firms
The Federal Government has directed that all Nigerian National Petroleum Company Limited (NNPCL) Tax Credit road projects valued below ₦20 billion be awarded exclusively to indigenous contractors, barring foreign firms from such contracts.
The policy, announced by Minister of Works David Umahi during an inspection of the East–West Road in Rivers State on 9 September 2025, falls under the Ministry’s Nigeria First initiative. It is designed to deepen local participation in infrastructure delivery while ensuring continuity of projects initially funded by NNPCL.
Sustaining Tax Credit Projects Amid Funding Shift
The NNPCL officially stopped direct funding of road infrastructure under the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme on 1 August 2025, leaving an estimated ₦3 trillion worth of projects outstanding.
To prevent abandonment, President Bola Tinubu instructed the Ministry of Works to adopt a prioritisation framework. According to Umahi, the ministry has compiled inherited projects and ranked them along key national economic corridors, with a focus on sustainability and systematic funding.
“This directive ensures that projects below the ₦20 billion threshold will not be awarded to expatriate firms. It is a strategic step to empower Nigerian companies under the Nigeria First policy,” Umahi said.
Quality Standards and Sanctions
While emphasising the government’s commitment to domestic participation, Umahi warned contractors that adherence to quality and timelines remains non-negotiable. He cited recurring lapses such as exposing binder courses to weather conditions, which compromise road durability, and cautioned that poor workmanship would attract sanctions, including possible referral to anti-graft agencies.
During his visit, Umahi inspected several projects, including the Eleme–Onne section of the East–West Road handled by Reynolds Construction Company (RCC). He praised the quality of RCC’s work but criticised the slow pace, reiterating that the 15 December 2025 completion deadline remains firm, with no extensions or cost variations permitted. Other inspections covered sections of the Enugu–Port Harcourt Expressway managed by China Civil Engineering Construction Company (CCECC) and Arab Contractors.
Broader Funding Outlook
Beyond the current prioritisation, the Ministry of Works is exploring Public-Private Partnerships (PPPs) to close the infrastructure funding gap. Umahi indicated that future projects would favour firms with proven financial and technical capacity to deliver to standard.
Key Takeaway
The government’s decision to reserve sub-₦20 billion NNPCL Tax Credit contracts for indigenous contractors underscores its push to strengthen local participation in infrastructure development. However, with over ₦3 trillion in outstanding road projects and limited funding channels, the effectiveness of this policy will depend on the ability of local firms to meet delivery standards and timelines while maintaining quality.
