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Nigeria’s Federal Government has Backlog of 854 Road Projects Worth $17bn

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Nigeria’s Minister of Works and Housing, Babatunde Fashola, yesterday cautioned against starting new roads and other projects, until progress is made with the ongoing projects.

This was as he disclosed that the federal government is currently undertaking a total of 854 highway contracts of over N7 trillion ($17 billion).

Fashola who said these when he appeared before the House of Representatives Committee on Works to defend the ministry’s 2022 budget proposal, said the major challenge to the ministry’s efforts towards the timely completion of projects was insufficient budgetary provision and releases for projects to sustain annual cash-flow requirement levels.

He, therefore, appealed that limited resources should be concentrated on the completion of ongoing projects, saying all can’t be done with one budget cycle.

Fashola said, “We appropriate for a token amount for a project of certain quantum, now once the award is done, the question of financing becomes a challenge. With the inflation and everything, there must come a time and I think that time is now; Mr. Chairman and honourable members, enough of new roads and new projects.

“Let us concentrate our limited resources to complete or progress some of what we have started; in finding the solution. I will be happy, there are a couple of roads in Osun State and we cannot finish all of them in one budget circle.

“If the parliamentarians from each state can come together and say, this is on priority project for us and decide that let us move our zonal intervention project and say this is what we want to achieve; it is an honest conversation we must have.”

Presenting the ministry’s N450 billion 2022 budget proposal, Fashola said from the total amount, N382 billion was for capital expenditure; N627 billion was for overhead and N10 billion was for personnel cost.

He said the focus of the 2022 budget was on completion of some priority road projects, especially those on route A1-A9, which leads to the ports and major agricultural hubs attracting vehicles carrying heavy goods in the zones.

He also said that the federal government was undertaking a total of 854 highway contracts at a total contract sum of N7,430,336,544,574.86.

He explained that the projects were expected to be financed through the Presidential Infrastructure Fund, Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, the Sovereign Sukuk Fund, Multilateral Loans among others

While assuring that the ongoing works on the second Niger bridge in the south-east would be completed in 2022, the Minister solicited for improved funding of road development from annual budgetary provisions in order to aid the completion of other critical on-going projects.

He added: “The Ministry is currently undertaking a total of 854 highway contracts at a total contract sum of N7,430,336,544,574.86 spread over the six geo-political zones in the country.

These are roads and bridges that lead to ports and major agricultural hubs and carry heavy goods vehicles across the six geo-political zones.

“In view of the wide disparity between the actual 2022 indicative cost of execution of highway projects of N1,384,622,535,379.62 and the actual budget envelope of N282,636,433,510.69 the prioritisation of funding in the 2022 budget becomes imperative in order to make an appreciable impact.

“Secondly, the Ministry has identified some strategic road projects that have already attained some appreciable percentage completion and slated them for completion within the period 2021-2023.”

Reviewing the ministry’s N347 billion 2021 budget performance, Fashola said the ministry had incurred more liabilities as it owes contractors the sum of N420 billion.

According to him, out of the total amount outstanding for payment to contractors for duly certified and approved works as at 20th October, 2021, was the sum of N420,583,705,963.48.

He explained that out of the total amount allocated to the ministry for capital expenditure, N182.97 billion had been released.

He further explained that of the amount released, N114 billion was allocated to the works sector while the housing sector got N68 billion.

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