The Senate Committee on Local Content on Wednesday held the first interactive session with the leadership of the Nigerian Content Development and Monitoring Board (NCDMB) at the Senate Building at Abuja and resolved to collaborate and deepen the implementation of local content in the oil and gas industry and linkage sectors.
The Chairman of the Committee, Senator Natasha Akpoti-Uduaghan moderated the meeting and assured that the committee would not antagonize the Board and other entities under its supervision but would collaborate towards effective implementation of the Board’s mandate for the benefit of Nigerians.
She expressed concern over the parlous state of the economy, particularly the alarming level of unemployment which has fuelled an increase in criminality. She emphasised the need to deepen the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD Act, to create employment opportunities from the activities in the oil industry and catalyse other sectors of the economy.
She requested the Board to submits performance reports on the implementation of the NOGICD Act, specifically on the Board’s third-party investments, capacity building programmes, expatriate quota management and research and development. She also requested the Board to recommend sections of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act that needed to be amended by the National Assembly.
Other questions raised by the committee concerned the status of the Nigerian Content Development Fund (NCDF) and the performance of the Nigerian Content Intervention Fund (NCI Fund).
The Committee Chair criticised the international oil companies (IOCs) in Nigeria for not investing in the petrochemical sub-sector and other associated manufacturing activities, whereas IOCs in other oil producing jurisdictions make such investments and contribute significantly to those economies. She announced that the committee would invite the IOCs and other relevant agencies of Government, with a view to compel the companies to create tangible value in the Nigerian economy beyond the extraction and sale of crude oil. She said: “We need to get them around the table and tell them what we want as a country as against watching them export crude oil only.”
In his comments, the Executive Secretary NCDMB, Engr. Felix Omatsola Ogbe thanked the committee for adopting a cooperative approach and assured that the Board would provide all the requested documentations and partner effectively, to achieve the mandate of the committee and that of the Board.
On the Board’s performance, the Executive Secretary stated that the Nigerian Content level for 2022 and 2023 stood at 54 percent and the Board is on course to accomplish the 70 percent target for 2027, as set in the Nigerian Content roadmap.
On international oil companies’ model of operation in Nigeria, the Executive Secretary explained that most oil conglomerates have different arms, which includes the downstream companies which make such investments in the petrochemical and linkage sub-sectors. He however, noted that most operating companies in Nigeria do not have such subsidiaries in the country, hinting that the Board is willing to support indigenous firms that are interested in such ventures.
He added that the Board lacked the mandate to compel the IOCs to change their business model in Nigeria but was collaborating with some oil companies to develop the Nigerian Oil and Gas Parks Scheme (NOGaPs), which is designed to manufacture oil and gas equipment and components as well as other manufacturing and research and technology programmes.
The Director Finance and Personnel Management, NCDMB, Dr. Obinna Ofili provided clarity on the performance of the Nigerian Content Intervention Fund (NCI Fund) and the Nigerian Content Development Fund (NCDF). He explained that the NCI Fund is managed by the Bank of Industry (BoI) on behalf of the Board, and US$300m was deposited with the BOI. He clarified that the NCI Fund is a portion of the NCDF – which is pooled from the 1% percent of every contract awarded in the upstream sector of the Nigerian oil and gas industry, as specified in section 104 of the NOGICD Act.
He also revealed that BoI had loaned out US$330m to 70 qualified oil and gas companies, with the additional $30m accruing from the interests from the loans. He mentioned that another Fund created by the NCDMB is the US$50m domiciled with the Nigerian Export-Import Bank and it is broken into $30m for working capital and capacity building and $20m for Women in Oil and Gas. Dr. Ofili indicated that eight firms have accessed the $30m working capital and capacity building fund, while three firms have successfully accessed the Women in oil and gas fund. He said: “We want serious minded women entrepreneurs in the oil and gas industry to step forward and access this fund. That is the only way it can make impact in the economy.”
The Director asserted that the NCI Fund is the most successful fund scheme in the country, basing his assessment on the faithful repairment by the beneficiaries and the growth of the fund. He mentioned that the Bank of Industry carries out quarterly project monitoring on the loan beneficiaries, while the NCDMB holds an annual monitoring review on the fund scheme and beneficiaries.
On the proposed amendment of the NOGICD Act, the Director Monitoring and Evaluation, Mr. Abdulmalik Halilu explained that concerted efforts were made during the tenure of the 9th National Assembly to review the legislation and the Board developed a compendium on areas that it believed should be amended. He promised that the Board would submit the compendium to the Senate so it could become the reference point for further discussions and considerations.