FG Reserves Road Contracts Below N20bn for Indigenous Firms Under ‘Nigeria First’ Policy
ABUJA, FCT – September 10, 2025 – The Federal Government has rolled out a significant new policy under its “Nigeria First” initiative, directing that all road contracts funded through the NNPCL Tax Credit Scheme with a value below N20 billion will now be reserved exclusively for indigenous contractors.
The move, which bars expatriate firms from bidding for these projects, is a strategic effort by the Ministry of Works to strengthen local content and build the capacity of Nigerian companies in national infrastructure delivery.
The Minister of Works, David Umahi, announced the decision on Tuesday, September 9, 2025, during an inspection tour of the East-West Road in Rivers State.
A Strategic Push for Local Content
According to a statement from the ministry, the new directive is a core component of the government’s plan to empower local firms.
“He directed that henceforth any project below the contract sum of N20 Billion would not be given to expatriate firms, and this he said is part of measures to promote the Nigeria First policy of Federal Government of Nigeria,” the statement read.
This policy is designed to ensure that a significant portion of the capital invested in road construction is retained within the Nigerian economy, fostering job creation and skill development.
No Compromise on Quality: Stern Warning to Contractors
While promoting local participation, Minister Umahi issued a stern warning that the policy is not a license for substandard work. He emphasized that all contractors, indigenous or expatriate, will be held to the highest standards of quality and timely delivery.
He cautioned that any lapses in workmanship would attract severe sanctions, including the potential for referral to anti-graft agencies for investigation. The minister specifically pointed to recurring poor construction practices, such as contractors leaving binder courses unprotected, which compromises the long-term durability of roads. He declared that such practices would no longer be tolerated on any federal project nationwide.
Context: Sustaining Projects After NNPCL Funding Halt
This new policy comes as the Ministry of Works navigates a challenging funding landscape. On August 1, 2025, the Nigerian National Petroleum Company Limited (NNPCL) halted its direct funding for road projects under the popular Tax Credit Scheme, leaving an estimated N3 trillion worth of ongoing projects in limbo.
To prevent the mass abandonment of these critical projects, President Bola Tinubu directed the Ministry of Works to develop a prioritization framework to ensure their continuation. The reservation of smaller contracts for local firms is part of the broader strategy to manage the available funds and keep projects on track. The government is also actively considering Public-Private Partnerships (PPP) to bridge the funding gap.
Spotlight on Ongoing Projects: Deadlines Remain Firm
During his inspection tour in Rivers State, the minister demonstrated a hands-on approach to project oversight. On the Eleme–Onne road project, handled by Reynolds Construction Company (RCC), Umahi commended the quality of the work but strongly criticized the slow pace of construction.
He reiterated that the December 15, 2025, completion deadline for the project is non-negotiable and warned that no extensions or cost variations would be approved. The minister also inspected other key projects, including sections of the Enugu–Port Harcourt Expressway.
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