By Fortune Alfred
April 22, 2020 marked the 10th anniversary of the establishment of Nigerian Content Development and Monitoring Board (NCDMB), the primary vehicle through which the Nigerian state pursue its policy and strategy to domesticate and domiciliate key value adding components of its Oil and Gas industry by developing the capacity of its citizens as well as monitoring the utilization of such capacities in-country.
Ordinarily given the pivotal role the Local Content Board plays in the country’s drive for industrialization, capacity building, employment generation and wealth creation, its 10th anniversary is a milestone that is worthy of celebrations. Such an event would have not provided an opportunity for the industry to reflect on the country’s Local Content journey in the past decade, juxtaposing where things were before the advent of the Board and the current state of things, but also provide opportunities for the Board and its Publics to assess its achievements with a view at looking at the journey ahead. This is especially important when we consider that the current Executive Secretary of the Board, the visionary Simbi Kesiye Wabote, a thoroughbred Oil industry expert with an illustrious track record of excellence under his belt, having worked at Shell for over 25 years, has developed a 10 year Roadmap for the Board. The Roadmap delineates the Board’s activity schedule and sets new milestones towards increasing Nigerian Content performance from 28% to 70% by 2027. This is projected to result in the creation of 300, 000 jobs and retain US$14bn in-country out of the US$20bn annual industry spend.
Notwithstanding the Board’s many achievements in its 10 year existence, some of which I shall highlight, due to the prevalent mood of the world and nation especially following the passing of the Chief of Staff to the President who was a mentor to the Wabote within the anniversary week, their April 22 passed like every other day in this era of Social Distancing without pump and pageantry. Indeed, Mankind presently live in a truly historic period. A time like none before it: when almost the entire world is shut-down and virtually closed for business due to a novel health emergency that is holding our planet hostage.
Since December 31, 2019 when samples taken from 27 pneumonia cases of unknown cause by the Wuhan Municipal Health Commission in Hubei Province, mainland China tested positive for a novel coronavirus, known since February 11, 2020 as Covid-19, the world has not been (and may very well never be) the same. Covid-19 has spread like wildfire to other parts of the world, leaving many people dead and economies devastated, prompting the World Health Organization (WHO) to declare it a global pandemic on March 11, 2020. According to WHO official data, as at April 18, 2020, there are 2,160,207 confirmed cases of Covid-19 and 146,088 deaths due to it globally. Of these numbers Africa has 13,104 confirmed cases and 5598 deaths; just as Nigeria has also recorded 541 confirmed cases and 19 deaths. In summary, what may have appeared as a diseases that was the concern of the people of faraway Wuhan(a city of whose existence, I must confess, I was hitherto ignorant before the outbreak of this virus) has snowballed into the biggest problematic of our time; thereby once more exposing the level of interconnectivity of our global system.
Nonetheless as we continue to grapple with the reality of this virus and its impact on all facets of our private and national life, the government imposed restrictions on movement has given me time to reflect on some of the lessons we, Nigerians can learn from this period as we continue our daily struggle to climb the ladder of economic development as a nation. I intend to treat one such lesson in this article in relation to the work of the NCDMB.
I am of the considered opinion that if the Covid-19 Pandemic and the nation’s response ability have taught Nigerians and our government any lesson, it should be the lesson that we seriously need to build our local productive capabilities with the clear aim of achieving a reasonable level of self-reliance. Covid-19 has not only exposed the true health of our healthcare system which would not be a breaking news to majority of Nigerians, it has especially exposed the high level of dependence of the country on the Asian countries such as India and now China for its medical supply. From Testing Kits to Personal Protective Equipment to Ventilators Nigeria depends on the generosity of Asian countries like China that has sent some of its doctors to Nigeria and individuals like Billionaire, Jack Ma. It would interest you to know that the Local Content Board also donated Medical supplies and food items to some States in the country. However, the medical equipment like the hospital beds, PPEs, Ventilators, Ambulances they donated as part of their support to the efforts at checking the spread of Covid-19, are most likely not produced in Nigeria. Pleased against the fact that a smaller West African State, Senegal is reported to be producing its own Testing Kits and Ventilators, the state of Nigeria’s dependence which pushed the Federal Ministry of Finance to beg for Ventilators from Elon Musk, calls for a serious rethink of the Country’s local content policy and reechoes the need to extend the Local Content policy to other sectors of the Nigeria economy such as Health, Telecommunications, ICT, Construction, to name a few. It is only through such deliberate policy that Nigeria can come out of the level of dependency this Covi-19 pandemic has highlighted.
This must have been the dangerous level of dependency that the Nigerian government tried to prevent in the nation’s oil and gas sector by enacting the Nigerian Oil and Gas Industry Content Development (NOGICD) Act in 2010 which in turn birthed the Nigeria Content Development Management Board (NCDMB) as the driver of the policy.
My call for the extension of Local Content to other sectors is necessitated by the huge successes the Board has recorded in the last 10 years in the pursuit of its mandate. AN Executive summary of the Board’s achievement in the last 10 years shows that it has increased in-country value retention from less than 5% before the NOGICD Act to the current over 26%; developed 2 world class Pipe mills and 5 pipeline coating plants; grown the fabrication capability to over 60,000 metric tonnes per year; developed our capacity to carry out over 80% of engineering design in-country;delivered of over 6 million training manhours; ensured the award of over 90% of contacts to Nigerians, facilitated the growth of successful indigenous operators and put in place facility for in-country FPSO integration, and many more that I shall highlight later. Just a little over a week ago, the Board approved the Nigerian Content Compliance Certificate (NCCC) and Approved Vendors Lists (AVLs) for the Nigeria LNG Train 7 Project which would certainly create many jobs for Nigerians.
The many achievements of the Local Content Board in the last decade could be categorized into four broad thematic areas, namely the provision of: 1. Funding and Incentives, 2. Strategic Investments/ Interventions; 3. Enabling Policy/Regulatory framework; and 4. Structured capacity building intervention. Let’s now look at each of these thematic areas of achievement to see what they entail, starting with Funding and Incentives.
Firstly, one of the greatest achievement of the NCDMB in the last 10 years and especially under Wabote is the provision of funding and incentives to Nigerian Oil and Gas Industry operators. Propelled by the conviction that Fiscal and monetary incentives are essential to attract new investments and keep existing businesses afloat where required, the Board working with the Nigerian Bank of Industry in August 2017 established the $200 million Nigerian Content Intervention Fund (NCI Fund) for Nigerian oil and gas service providers that are contributors to the Nigerian Content Development Fund. The intervention fund provides affordable all-in single digit interest rate of 8% for loans extended to Nigerian Oil and Gas Service providers and all-in single digit interest rate of 5% for loans extended to community contractors, all with one year moratorium. Interestingly, as part of its Covid-19 palliatives to operators in the oil and gas industry, the Board has last week further reduced the interest rate from 8 to 6% per annum and extended the moratorium and tenor of its debtors. The NCI Fund has enhanced the capacity of local service companies in the areas of manufacturing, asset acquisition and contract financing and enabled them create jobs for thousands of Nigerians, which is one of the main objective of the Board. In the thinking of the Board’s current boss, job creation is a key ingredient that must drive all the Boards operations from training programmes to investments it catalyzes.
Another achievement of the Board in the last decade is the creation of Project100 in conjunction with the Federal Ministry of Petroleum Resources. Project100 is an innovative initiative that provides institutional and financial support to 100 Indigenous oil and gas service companies. Through it, the Board identified 100 oil and gas start-ups and deployed special institutional interventions for their incubation, maturation and growth into world class service companies. The selected indigenous companies offering seismic, marine, engineering and drilling services enjoy special interventions, including access to capacity building, funding and access to market. In other words, this companies enjoy special privileges from the government that are aimed at buoying them into globally competitive actors in their area.
Yet another strategic funding and incentive created by the Board is the recently created NCDMB
$50m Nigerian Content Research & Development Fund to drive innovation in the oil and gas industry and support inventors in the sector. This is in line with Engr Wabote’s belief that Research and Development (R&D) is a key parameter for sustainable local content practice. As he rightly pointed out in his Keynote Address at the Nigeria Oil and Gas Industry Research and Development Fair and Conference on September 25, 2017, “Local content thrives where there is robust R&D guideline to drive development of home-grown technology.” The Nigerian Content R&D Fund is aimed at providing finance to support guidelines to drive the development of local technological advancements. The initiative has already received support and praise from many industry watchers. One such supporter is the Minister of State for Petroleum Resources, Chief Timipre Sylva who on March 17, 2020 commended the Board’s R&D initiative and described R&D as a major pathway to job creation and the transformation of the nation from a resource-based to a knowledge-based economy. Essentially, this Fund is aimed at creating the needed synergy between the proverbial “Gown and Town”. It is aimed at institutionalizing the Board’s already existing support to innovation Hubs in Universities across the country such as the University of Port Harcourt, Federal University of Technology, Minna, Federal University of Technology, Owerri (FUTO), etc. For years innovators from different Nigerian Universities have been exhibiting their works at the Board’s flagship events like the Practical Nigerian Content Forum (PNC) Nigerian Oil and Gas Opportunity Fair (NOGOF) the aforementioned Nigeria Oil and Gas Industry Research and Development Fair and Conference, etc. Therefore this Fund provides a purse for them to support their works from conception to the market.
The area of achievements of the NCDMB in the period under review that I find most innovative and pragmatic is the set of initiatives I have characterized as Strategic Investments/ Interventions in this piece.
The first of these strategic Investments/Interventions is the the initiation of Nigerian Oil & Gas Parks Scheme (NOGaPS). NCDMB has made remarkable progress with the development of 3 oil and gas parks, located in Odukpani, Cross River, Emeyal-1 in Bayelsa State and Ikwe, in Onna LGA, Akwa Ibom State. These parks will domicile and domesticate manufacturing in-country, especially critical oil and gas equipment, tools and spare parts.
The facilities in each of the Parks will include: truck holding areas, toll gate facilities, crane lifting, jetties, factory units, Independent Power Plants, water plants, warehouses, fire stations, maintenance workshops, park centres, clinics and technological huts. There will also be administrative areas. Construction has reached advanced stages in Bayelsa and Cross River States respectively. A key benefit of the NOGaPS is that about 2,000 jobs are projected to be created when each of the parks is in full operation in addition to serving as capacity development centers and on-the-job training hub for Nigerian youths. As a deliberate policy of the Board, Community suppliers also participate in the supply of sand, granite, water, fuel and other construction materials determined by the contractor subject to the quality required and fair market price thereby further boosting the local economies.
Since its inception in 2010, in my view, one of the most revolutionary initiatives of the NCDMB is its intervention and direct investment as Support for the development of Modular Refineries in Nigeria. You would recall that Modular Refineries are part of the Federal Government’s grans strategy to achieve product availability, create jobs and reduce oil theft and pipe line vandalism in the Niger Delta.
Against this backdrop, the Board invested substantial equity in the Waltermith’s 5000 barrels per day (bpd) modular refinery located in Ibigwe, Imo State and Azikel 12,000 bpd hydro-skimming modular refinery at Obunagha in Bayelsa State. The Board’s capital injection and institutional backing energized the construction of the refineries, leading to nearly 1000 new employments and expected value addition to our hydro carbon resources and reduction in pipeline vandalism, product theft and other social vices. With this strategic investments, the Board moved from being a mere regulator (as important as that may be) to become a real stakeholder with a seat in the Boardrooms of these Refineries thereby crystalizing their speedy development. The Waltermith’s plant is scheduled for commissioning in 2020, while Azikel’s project is projected to be ready in 2021. This is a good use of state power to buoy strategic private businesses to success.
The next worthy achievement of the Board in the past 10 years is its efforts at catalyzing a Gas Cylinder Manufacturing & Pressure Metering Plant at Polaku in Bayelsa State. The NCDMB is catalyzing the establishment of a 400,000/year Type-3 LPG Cylinders manufacturing plant at Polaku, Bayelsa State by Rungas Prime Industries Ltd. In March 2020, the Board allotted two hectares of land at Polaku to the firm and will also support it with equity investment. NCDMB is also supporting Shell Nigeria Gas (SNG) towards the development of a Pressure Reduction and Metering Station at Polaku. NCDMB signed an agreement with SNG for the lease of one hectare of Polaku land for the investment. As the ES noted the Board decided to use part of its land to catalyze the distribution and availability of natural gas to domestic gas to users within Bayelsa and neighboring states, in line with the agency’s vision to be a catalyst for the industrialization of the Nigerian oil and gas industry and its linkage sectors.
According to him, the availability of natural gas will open up the corridor of opportunities for new and existing investors. He added that NCDMB is already in receipt of proposals for the location of power plants, CNG plants, and other manufacturing outfits in Polaku. These projects are already projected to create 30,000 jobs in the state.
Closely related to the Gas Investments in Polaku, are other Gas based Investments promoted by the Board. NCDMB has secured approvals to support the establishment of a 168,000MT per annum loading and off-loading LPG terminal in Koko, Delta State and another facility in Port Harcourt, Rivers State, dedicated to the production of 48,000 liters/day base oil from used engine oil. All of these are in
The Board also has an ambitious 25-megawatt (MW) independent power plant (IPP) which is being constructed in conjunction with the Nigerian Agip Oil Company (NAOC) to power its 17-storey headquarters building in Yenagoa, the Emeyal Oil and Gas Park among other dedicated facilities. President Muhammadu Buhari was scheduled to commission the first phase of the Gas- Fire Power Plant, which is 10 Megawatts on February 14, 2020 but that ceremony was postponed indefinitely.
Also ready for commissioning by President Buhari on his botched visit to Bayelsa State on February 2020 was the completed NCDMB Corporate Headquarters, the Nigerian Content Tower. This 17-storey headquarters building in Swali, Yenagoa, Bayelsa State which was constructed using Megastar Technical and Construction Company, an indigenous contractor stands as the tallest edifice in the South-South and South East regions of the country in the last 40 years. The Nigerian Content Tower was completed within five years generating about 250,000 direct and indirect jobs. It also provided ample opportunity for artisanal skills development and other capacity building opportunities. This is because in line with the vision of the Board, Megastar trained many unskilled and semi-skilled workers and utilize same as well as local materials and equipment in building the Nigerian Content Tower that is a physical advertisement and quintessential embodiment of practical local content in Nigeria. In this building, the Board walked the talk of local content by demonstrating absolute faith in a local construction firm that has since become a major player from owing in part to the huge experience they gained from that project.
As I have highlighted above, in the period under review, the Board has also recorded giant strides in the area of providing enabling Policy/Regulatory framework
One such policies is the Introduction of the novel Service Level Agreement (SLAs) between NCDMB and critical oil and gas operating companies and other key industry stakeholders.
The introduction of SLAs has resulted in shortening the protracted tendering cycle in the oil and gas industry from 36 months to 9 months. This initiative, in addition to reducing the tendering cycle has also enhanced broad compliance with the requirements of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, leading to significant reduction in the unit cost of oil production in Nigeria. One of the significant and vital outcomes of the SLAs is the record-breaking reduction in the duration between the approval of NC Plan and the signing of LOI for NLNG Train-7 project to 5 months and approval of the Nigerian Content compliance for the commercial evaluation within 48hours of submission to the Board. This is historic.
A second achievement of the Board in under the enabling Policy/Regulatory Framework is the Automation of NCDMB’s Processes. NCDMB has initiated full automation of the Nigerian Content processes, notably the application and approval of expatriate quota approvals, Nigerian Content Plan, Nigerian Content Equipment Certification and Nigerian Content Compliance Certificate. This initiative has promoted efficiency and effective service delivery as well as enhanced transparency in the oil and gas industry. As a result of this initiative Industry operators could interface with the Board without necessarily visiting its Offices.
Moreso, the Board as also reengineered and deployed a new Monitoring and Compliance Template for Nigerian Content Monitoring and Evaluation (M&E). The new framework simplifies the processes and procedures for reporting Nigerian Content performance. It also enhances speed of compliance and quality of data gathering.
Closely related to the above is the Board’s introduction of Third Party Monitors to enhance effective monitoring. During the 10 year of its existence, NCDMB has introduced and deployed seven third party monitors to ensure effective monitoring of operating and service companies, drive compliance and deepen Local Content performance in the industry.
Furthermore, the Local Content Board has also recorded another achievements via Marine Vessel Categorization. The Board has harmonized the Marine Vessel Categorization standards with that of NIMASA and NIWA, with a bid to increase indigenous participation, manning and ownership in marine operations of the oil and gas industry. It is worthy of note that in October 2018, the Board took its interest in the nation’s Maritime sector a notch further by sponsoring 20 Cadet for the mandatory sea time training programme at Charkins Maritime and Offshore Services Limited, Port Harcourt, Rivers State. The programme was aimed at addressing the deficit of trained cadets in the maritime and oil and gas industries and reduce the dependence on foreign personnel in the marine operations. The trainees were selected from the Nigerian Oil and Gas Industry Content Joint Qualification System (NOGIC JQS) which is a key component of its full automation policy. This now takes us to another major area of achievement of the Board that is key to its mandate, namely structured capacity building interventions.
In the last decade, especially under Simbi Wabote, the Board has greatly Supported ICT & Stem Education. The NCDMB has set up about 30 ICT labs in secondary schools across Nigeria and trained over 1,000 teachers as part of the Board’s intervention in STEM education.
The Board is currently carrying out upgrade works in two Vocational Education institutions in Abak and Amoli and recently completed a specialized programme for fifty (50) Electrical Engineers trained at the Lagos Energy Academy under partnership with AOS Orwell. 60 percent of the trainees secured employments with engineering firms based in Nigeria and overseas.
NCDMB has also created a special platform to support women participation in the oil and gas sector. Under this initiative, the Board has begun to champion gender friendly policies on access to funding, award of contracts and support for research and development.
As part of its Intervention in the North-East Region, the NCDMB have trained 107 Internally Displaced Persons (IDPs) in the region. The IDPs were trained on plumbing, welding, carpentry, bead making, general electrician, GSM phone repairs, soft skills and soap making. The Board also provided the trainees with starter packs, created online marketing platform and registered them as cooperative associations. In addition, the Board conducted a three months mentorship programme where the trainees passed through entrepreneurship training by Industrial Training Fund and were assigned to construction sites and productive ventures.
Finally in August 2019, NCDMB trained 1,000 youths in Kano on phone hardware repairs, software installation and entrepreneurship development. This programme was designed to develop a pool of local talents for assembly of GSM phones and development of software applications that are currently largely import dependent.
It is really difficult to capture the achievements of this very effective Board in one piece. For instance in order not to take much more of your time I have left out its achievements in forging effective collaborations with several other MDAs as well as the Board’s Foreign Policy Achievement which gives Nigeria a whole lot of soft power, i.e the role NCDMB has been playing in championing Local Content Development in Africa by providing guidance and sharing its expertise with sister African countries that want to institute Local Content policies in their countries among many others.
Giving the foregoing, one cannot help but conclude that the extension of the Local Content Act to cover other sectors and the proper implementation of Local Content practices would most likely replicate most of the successes recorded by the Board in the Oil and Gas Industry in those sectors. Nigeria’s local content journey in the last decade has enhanced the country’s productive and managerial capacities in the Oil and Gas sector, thereby reducing its level of dependence in that sector. It is against this background that I have in this paper called for the introduction of Local Content in our Health, ICT, Manufacturing, Construction, Telecommunication, Science and Technology, etc sectors. Nonetheless, the introduction of Local content is not on its own a magical solution that would bring the desired progress. The proper implementation of the policy as it has been done in the NCDMB experience over the last 10 years is of utmost importance. Care must be taken not to proliferate the practice of Local Content development and monitoring in those sectors. I recommend that any extension of local content to any of the aforementioned sectors should be done by amending the current Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010.
As we struggle to come out of the claws of Covid-19, may with emerge a stronger and more self-reliant domesticating and domiciliating the key value added components of other key sectors of our economy. It is only true that they we can truly be the independent and prosperous nation we and future generations of Nigerians can be proud of.
Fortune Alfred, a Doctoral Researcher in International Relations at the Department of Political Science, Niger Delta University, Wilberforce Island, writes from Yenagoa.