From Nigeria: The Federal Executive Council Approves the Road Trust Fund Scheme

Olaleye Adebiyi - Andersen LP in Nigeria, a member firm of Andersen Global

The Federal Executive Council approved the establishment of the Road Trust Fund (RTF) scheme on Thursday, October 26, 2017. The RTF scheme seeks to increase private sector participation in the construction and rehabilitation of Federal roads in Nigeria by incentivizing investment in road construction projects.

The RTF is a revision of the Infrastructure Tax Relief scheme introduced under the Companies Income Tax (Exemption of Profit) Order, 2012 that expired in April 2017. The new scheme will allow private sector operators to fund road construction in exchange for tax credits through collective efforts. The Ministry of Finance is expected to issue a detailed guideline for the implementation of the scheme.

The RTF scheme has the potential to increase the funds available for road development and accelerate road provision across the nation. The success or otherwise of the scheme will depend on the implementation and ability of the government to build the right level of trust with the private sector.

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