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Dangote Group explains tax concessions on infrastructure projects from government


Aliko Dangote, billionaire and chief executive officer of Dangote Group, PHOTO: Jason Alden/Bloomberg

Dangote Group has denied claims that the Federal Government’s tax incentive order will make the company benefit 10-year tax holiday after constructing the 35 kilometres Apapa to Oworonshoki long highway end of the Lagos-Ibadan Expressway.

Besides, the Group said that while the company has volunteered to repair the Apapa road as part of its Corporate Social Responsibility (CSR) at no cost to the Federal Government, the construction of Apapa to Oworonshoki long highway would be done at 15 to 25 per cent less than the lowest bid.

It would be recalled that the Federal Government said it would give tax relief to private sectors that invest in road construction in the country.


Speaking to journalists in Lagos on Monday, Group Executive Director, Strategy, Portfolio Development and Capital Projects, Dangote Industries Limited, Devakumar Edwin, revealed that the company has never benefited from any tax waiver or credit in its entire history except when it is industry-based and applies to all its competitors.

According to him, “It is very painful when some people accuse our company of benefitting 10 years’ tax rebate from the government. There is nothing like tax credit in all these. We volunteered to construct the Apapa to Oworonshoki long highway at a cost that will be about 15 to 25 per cent less than the lowest bid on the road.

“We hope to get back our money after three years by removing the sum from the tax we are supposed to pay,” he added.

He explained that the company proposed to the government to reduce 50 per cent of the total cost of the road, from its proposed tax, on its first year after completion and 25 per cent of the costs respectively for two years from its proposed tax.

“The government came forward and asked if it was possible to do proper road construction of 35 kilometers from Apapa to Oworonshoki? We advised the government to go for a competitive bidding and also, that we will take it up at a cost that will be lower than the lowest bid received by the government.”

He added: “Since the government may not be handy with cash, we proposed that we will recover our money in three years in installments against our future tax, the government will not pay anything to us, we will only offset our costs against our three years tax, so government will not pay us a dime for the road and it is not as if we are not paying tax.”

Meanwhile, Minister of Power, Works and Housing, Babatunde Fashola, who spoke at the Road Construction Summit 2017 organised by Lafarge and Business Day at the weekend in Lagos, said that there are a lot of possibilities that lie ahead when private capital comes into road construction under the tax relief order as proposed to be amended and complements government spending.

According to him, the government has just concluded an agreement using the tax incentive order to hand over the Apapa area comprising Creek Road, Liverpool Road, Marine Beach to Mile 2, Oshodi, Oworonshoki to the Lagos end of the Toll Gate on the Ibadan Expressway to Dangote Group.

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