Oil and Gas sector means quite a lot to Nigeria and her citizens. It has been central to the economy of the country since the 1970s. There is no doubt too, that it has brought wealth to the country and her people as most of the monumental, modern and sophisticated structures and infrastructures in the country today owe their creation to petrol-naira. But despite all the good things crude oil brought to the nation, not few Nigerians are unhappy with what Nigeria had lost in the process of exploiting crude oils. There has been cases of illegal oil bunkering, oil spillage with its attendant environmental degradation, excessive dependence on crude oil which led to neglect of other sectors of the economy, and so on.
However, one aspect of the crude oil exploitation that makes a mockery of Nigeria as giant of Africa is the near total dependence on foreign expertise and technology. While the oil boom of the 1970s and 1980s lasted, Nigeria merely waited for expatriates to do all the operations from seismic, drilling exportation and sales of the “blackgold” to delivering the dollars realized from the sales to the country’s Central Bank accounts. The presence of indigenous personnel technology was remarkably absent.
Agitation for a change produced very little result. The enactment of the Nigeria Oil & Gas Industry Content (NOGIC) Act in 2010 aimed at bringing greater involvement of the Nigerians in the sector has produced some appreciable results within the seven years period it has been in operation with the sector making tremendous gains in terms of what it has been able to draw back and domicile in the country.
The slow pace was attributable to a major handicap of Nigerians players who did not have the huge capital outlay required to do business in the sector.
All that seems to be over now with the inauguration of the N200b Nigerian Content Intervention Fund (NCIF) by the Buhari Administration. The Fund is a Nigerian Content Development & Monitoring Board (NCDMB) fund managed by Bank of Industry Limited (BOI). It is designed to achieve the following strategic objectives: To increase indigenous participation in the oil and gas industry, build local capacity and competencies.
To promote the growth and development of Nigerian Content in activities connected with sectors of the Nigerian oil and gas Industry.
To deepen the creation of linkages to other sectors of the national economy and boost industry contributions to the growth of Nigeria’s National Gross Domestic Product.
To address persistent funding challenges that have hindered capacity and growth of local service providers in oil and gas.
To facilitate the growth of community based companies in the upstream oil and gas sector.
To spur productivity and job creation in the Oil and Gas Industry.
To attract investment capital into the sector and boost contribution of the sector to Nigeria’s economic growth.
The creation of the Fund coupled with the inauguration of Engineer Simbi Wabote, as the Executive Secretary of the Nigerian Content Development and Management Board (NCDMB), by the Buhari administration seem to have the capacity to change the narrative of poor performance of local participants in the industry. Also soothing to hear is the fact that the intervention Fund, established in 2017 has a single digit interest rate of 8% for loans to Nigerian oil and gas service providers and single interest of 5% extended for loans to community contractors.
The Petroleum industry in Nigeria is considered to be the largest with the potential to generate average Gross Domestic Product (GDP) higher than any other country in the West Africa Sub region.
Over the years the oil and gas sector has continuously battled with the problems of infrastructural development, project financing, transparency and the dearth of local content participants in the industry.
But the recently launched 200 million dollars Nigerian Content Intervention Fund (NCIF) is expected to grow local capacity and increase so as to increase their participation in the Oil and Gas industry
Before this time the huge financial investment made by the government in the oil and gas industry had not resulted into significant benefits for most Nigerians as local content in the industry in Nigeria was very low, being that over 60 per cent of the industry was managed by multi-nationals.
The inauguration of Engineer Simbi Wabote, as the Executive Secretary of the Nigerian Content Development and Management Board (NCDMB), by the Buhari administration seem to have changed the narrative of poor performance of local participants in the industry.
The intervention fund which was established as an enabler in 2017 has a single digit interest rate of 8% for loans to Nigerian oil and gas service providers and single interest of 5% extended for loans to community contractors. Before the Fund was introduced, indigenous players were forced to source funds at commercial interest rates of between 15% and 26% which were not profitable to the borrowers.
It is pertinent that Engineer Wabote not only understands what is at stake for Nigeria, but has a clear idea about how to make success of the efforts of present government in the sector.
According to him, the aspiration of his Board in terms of its 10 years strategic plan, is to have up to 14 billion dollars out of the about 20 billion dollars domiciled in the country annually. The Board has also warned that the loan would not be treated as part of the national cake for sharing.
It is also good that the oil sector players themselves will have to contribute something before they can borrow from the Fund.
The AUTHORITY Newspapers supports this scheme and believes that this Fund could be the tonic needed to hand over the oil sector fully to Nigerians.