President Muhammadu Buhari recently signed the Executive Order No 7 of 2019, with its area of application being the ‘Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme’. It is designed to facilitate the accelerated development and delivery of roads infrastructure in the country through Public-Private Partnership (PPP). This is meant to close the wide infrastructure gap in the country, especially in the transportation sector.
The scheme provides for the involvement of private sector investors to develop such roads as qualify for their sustainable engagement and be reimbursed through a tax credit system. All expenses incurred by such private companies would be written off through deductions from their payable taxes. While signing the Order, the President said under the arrangement, 19 eligible road projects located in 11 states and across the six geopolitical zones, shall be undertaken by six leading manufacturing and construction companies.
He also said the initiative provides another opportunity for the government to demonstrate its commitment to conceive, design, develop and deliver PPP initiatives in collaboration with well-disposed partners. Justifying the initiative, the President cited revenue shortfalls, which ostensibly denies government the capacity to fund infrastructure development more formally through traditional statutory allocations. According to him, “At the inception of this administration, we met a significant backlog of local contractors’ debts, which we as a responsible administration have undertaken to clear.”
In the light of the foregoing therefore, Executive Order Seven is one of the sure-fire options available to the administration to deliver with respect to its agenda on roads infrastructure development. Buhari also extended blame for the resort to the Executive Order 7 to the National Assembly, whom he accused of not passing the budget of the federation expeditiously, thereby forcing the administration to seek extraordinary means to execute its projects, including this order.
The merit of the President’s argument notwithstanding, the resort to executive orders is a relatively recent development in Nigeria which raises questions over its utility and desirability. Ordinarily a stop gap measure, Executive Orders are Presidential directives that enjoy the force of law in their implementation, even as unlike formal laws, they do not have to pass through the Legislature. Hence, they are ‘short cut’ laws intended for enforcement which are not subjected to the routine scrutiny and due process of the legislative mill of law making. While they can be useful under circumstances when specific government activities which may not tolerate delays are involved, they can also be open to abuse, as their primary weakness is the possibility of miscarriage of intent, arising from their exclusive generation by the executive arm.
The case of Executive Order Seven may be admissible as its application is clearly defined as being roads development. This is just as its predecessors being Executive One to Six were intended to address other specific areas of the economy. However, the resort to Executive Orders to drive sectors and public projects presents the administration in less than complimentary light as one operating in a state of panic, or desirous of avoiding the full involvement of the legislature. Hence the resort to Executive Orders should be with utmost discretion and needs to be reduced to the barest minimum.
It is significant that the President cited the state of incontinence of fiscal operations, such as backlog of massive debts owed contractors and suboptimal levels of revenue collection. While the government needs to address itself to consolidating its fiscal operations, the issue of proper valuation of the designated projects under the scheme needs to be marshalled properly to save the country from sharp practices that may deny her the full benefits of the PPP.
Meanwhile against the present deficit in the country which is estimated to be about $3 trillion, the government needs to identify other areas of the economy where similar PPP intervention schemes can be applied.