Indigenous Contractors Can Bid for Road Projects Above N20 Billion

The Federal Government has clarified its position on the participation of local contractors in road construction projects, confirming that indigenous firms are not restricted to projects valued below N20 billion. The clarification came from the Minister of Works, David Umahi, during an inspection visit to the Carter Bridge in Lagos, where he addressed concerns that followed his earlier statements about contract limits.

Umahi explained that the government’s directive was not to confine Nigerian contractors to smaller projects, but rather to ensure that foreign companies are excluded from projects under N20 billion in value. According to him, indigenous firms are free to bid for contracts of any size, including those exceeding the N20 billion threshold, and can compete directly with expatriate contractors on larger projects. The intent, he stressed, is to prioritize Nigerian participation in infrastructure development while still maintaining opportunities for healthy competition at the higher levels.

His clarification followed widespread discussion after the Ministry of Works announced its “Nigeria First” policy, which reserved contracts below N20 billion exclusively for Nigerian firms. The policy initially sparked concern that local companies would be boxed into lower-value projects, leaving lucrative larger contracts in the hands of multinational firms. Umahi, however, dismissed these fears, stating that the arrangement was designed to protect local contractors, not limit them. In his words, expatriates will no longer be allowed to take smaller projects, but Nigerian contractors of significant capacity will be able to compete for both small and large projects alike.

The Minister also used the opportunity to raise serious concerns about the quality of work delivered by some contractors. He issued a directive that certificates previously given to firms that failed to cover binder courses on roads would be withdrawn. He explained that leaving binder courses exposed for over two months leads to premature deterioration and early road failure, a practice the government will no longer tolerate. Umahi warned that funds allocated to such defective projects would be recovered, and erring contractors would face sanctions.

He pointed to findings from inspections in Rivers and Abia States where contractors had laid binder courses for as much as 20 kilometres without applying the wearing course. According to him, such substandard practices compromise the durability of road projects and waste public resources. He stressed that this behavior reflects poorly on the credibility of local contractors and undermines the very policy meant to empower them. The Ministry, he said, will now enforce stricter monitoring to ensure compliance with engineering standards and to guarantee that roads last as intended.

The clarification aligns with the broader Nigeria First Policy of the Tinubu administration, which was adopted at a Federal Executive Council meeting earlier in the year. Under the policy, ministries, departments, and agencies are prohibited from procuring foreign goods and services when suitable local alternatives exist. The initiative aims to strengthen local industries, enforce compliance with local content laws, reduce import dependence, and boost the Nigerian economy through homegrown solutions. Where local capacity is not yet sufficient, foreign contracts are required to include provisions for technology transfer, skills development, and capacity building to ensure that Nigerians benefit in the long term.

The Works Ministry’s decision to reserve sub-N20 billion projects exclusively for indigenous contractors is therefore part of a larger government effort to stimulate local participation and keep more value within the Nigerian economy. By excluding foreign companies from lower-value projects, the policy provides smaller and medium-sized Nigerian contractors with a better chance to secure federal contracts, gain experience, and grow their businesses. At the same time, allowing indigenous firms to compete for higher-value projects ensures that capable local companies are not sidelined when it comes to large-scale infrastructure development.

Analysts believe this approach could create a more level playing field and help local contractors build capacity in an industry long dominated by foreign companies. Road construction in Nigeria has historically been shaped by multinational firms, which often secure the biggest contracts due to their technical expertise and financial muscle. However, this has sometimes come at the expense of developing local talent and firms. By drawing a line at N20 billion, the government is effectively carving out a protected space for indigenous contractors while also giving them the opportunity to step up and demonstrate that they can handle more complex, higher-value projects.

Umahi’s warning against shoddy construction also highlights the balance the government is trying to strike between empowering local contractors and demanding accountability. While the Nigeria First Policy seeks to promote indigenous participation, the Ministry is equally focused on ensuring that roads meet international standards and offer long-term value for money. The Minister’s decision to penalize contractors who fail to meet requirements sends a signal that the policy is not a blank cheque for mediocrity but an opportunity for Nigerian firms to prove their competence and professionalism.

The issue of road construction remains critical for Nigeria’s development agenda. With hundreds of billions of naira allocated to federal road projects annually, the sector represents both an opportunity for economic empowerment and a potential risk if mismanaged. The new policy could encourage greater participation of Nigerian firms, stimulate job creation, and foster technical growth, but it will require vigilant oversight to ensure that the goals are achieved without compromising quality.

Ultimately, the clarification that indigenous contractors are not confined to projects under N20 billion provides reassurance to stakeholders in the construction industry. It opens the door for ambitious Nigerian firms to compete on larger projects, including those worth tens of billions, and ensures that local contractors are not left behind in the government’s infrastructure drive. At the same time, it sets a new standard of accountability for contractors to deliver durable, high-quality roads that serve Nigerians for decades to come.