- Operators Eye $600m Local Content Fund
With the Nigerian Content Development and Monitoring Board set to ease access to the $600m Nigerian Content Development Fund, industry operators have expressed interest in the fund.
The Chairman, Petroleum Technology Association of Nigeria, Mr. Bank-Anthony Okoroafor, told our correspondent that many members of the association had applied for the fund, but the modalities had been the challenge.
He spoke on Wednesday on the sidelines of the 6th Practical Nigerian Content Conference in Abuja.
He said, “I think what the board is trying to do is to make it easier to access. None of our members has really been able to access it because of the too many hurdles. But now, the new board is coming up with clear guidelines for accessing the fund.”
Okoroafor, who noted that it was difficult to borrow money from the banks because of the high interest rates, said, “If you have any fund whose interest rate is lower, and if you make it easy for people to access, a lot of people will be interested. But what matters is the conditionality attached to it.
“Whoever wants to access the fund, the people managing it must find out whether what the fund will be used for is in line with the objectives of the fund, which include building capacity and adding to your facilities.”
The Executive Secretary, NCDMB, Mr. Simbi Wabote, also said at the conference on Wednesday that the board was working to close skills, infrastructure and assets ownership gaps in the oil and gas industry.
The NCDF, which is funded from the one per cent deducted from the value of all upstream contracts, is underpinned by Section 104 of the Nigerian Oil and Gas Industry Content Development Act.
The fund was designed to provide partial guarantees and 50 per cent interest rebate to service companies that obtain facilities from commercial banks for asset acquisition and projects execution.
The Act provides that the funds be used for the development of capacity in the oil and gas industry.
The NCDMB executive director said, “Any time you assemble a gathering and you talk about the Nigerian Content Development Fund, everybody wants to know what will become of the fund. What this current board will assure you is that within the shortest time possible, we will come out with a clear blueprint on how that fund will be utilised to promote local content development in our industry.
“We will no longer have a situation where people continue to wonder what is happening to that fund, if it has been put into political use or into local content development. One thing I can assure you is that very soon, a transparent process of accessing that fund will be made known to all stakeholders.”
Noting that the fund had grown over the years, Wabote said six Nigerian companies had tapped it for capacity development.
He said, “I must say that it is not directly giving money to those six Nigerian contractors; it is about guaranteeing some of the loans that they got from the banks because we are not a funding institution.
“Not much has been expended from that fund for capacity development. Part of the strategy of this new board is to come out with a very transparent process through which genuine Nigerian contractors involved in the oil and gas sector will have access to the fund.
“While the people who are contributing worry about the fund they have contributed, there are a lot of Nigerian companies that are not making their contributions as enshrined in the Act. This board will look at strategies to make them comply with the provisions of the Act.”
The NOGICD Act seeks to develop Nigerian content across the oil and gas value chain – upstream, midstream and downstream sectors, according to Wabote.
He said, “There is an opportunity for demand-driven investments across the oil and gas industry value chain. Today, a lot of people ask me, why is Nigerian content not also focusing on the downstream and midstream activities? My response is simple: with the new board and the council, our focus will go beyond the operators in the upstream sector; our activities are all-encompassing as enshrined in the Act.”
The NCDMB boss said one of the interventions the board had put in place to attract investments and stimulate domiciliation of manufacturing activities was the Equipment, Components Manufacturing Initiative.
He said the ECMI was developed to promote the local manufacturing of equipment, components, spare parts and other accessories for the Nigerian oil and gas industry.
He said, “So far, we have issued 1,430 certificates as of October 31, 2016. This translates to investment commitment valued to about $2bn as of today. The board ensures that the commitments are complied with before reviewing or issuing certificates to companies.
“Some other initiatives that the board has put in place to stimulate domiciliation of manufacturing and other value-adding activities include the establishment of the oil and gas park that will serve as the manufacturing hub for equipment and the provision of funding support for local manufacturers of the LPG cylinders.”
Akinwumi Adesina Says It Is Impossible for Businesses to Survive Without Generator in Nigeria
The President of the African Development Bank (AFDB), Akinwumi Adesina faulted the lack of reliable power supply in Nigeria as a hindrance to industrial growth in the nation.
Speaking at the 49th Annual General Meeting of the Manufacturers Association of Nigeria in Abuja, Adesina stated that Nigerians spend $14 billion yearly on generators and fuel. He further went on to quote a report by the International Monetary Fund (IMF) which stated that Nigeria loses $29 billion annually, about 5.8 percent of its Gross Domestic Product due to a lack of reliable power supply.
He went on to note the various challenges affecting manufacturing in the country stating that lack of reliable power supply in the country is a major challenge to manufacturers. His words were “To be a manufacturer in Nigeria is not an easy task. You succeed not because of the ease of doing business in the country, but by surmounting multiple constraints that limit industrial manufacturing. Today, the major challenge facing Nigeria’s manufacturing is the very high cost and unreliability of electricity supply. Load shedding and the inconsistent availability of electrical power have resulted in high and uncompetitive manufacturing costs.”
He went on saying “Today, no business can survive in Nigeria without generators. Consequently, the abnormal has become normal. Traveling on a road one day in Lagos, I saw an advertisement on a billboard that caught my attention. It was advertising generators with the bold statement, we are the Nation’s number one reliable power supplier!!”
He then went on to proffer potential solutions to the problem, saying that Nigeria should invest in different means of energy generation to ensure the efficiency of the local industries. He suggested there should be massive investment in variable energy mixes, including gas, hydropower resources, and large-scale solar systems to ensure stable baseload power for industries to direct power preferentially to industries and to support industrial mini-grids and concentrate power in industrial zones. In addition, he suggested the development of more efficient utilities which would reduce the technical and non-technical losses in power generation, transmission and distribution systems.
World Bank Says Nigeria’s Economy is Static, Per Capita Income Unchanged in 40 Years
The World Bank claims Nigeria’s per capita income has been static since 1981, which is a total of 40 years.
The Country Director of the World Bank, Shubham Chaudhuri said this at the breakout panel session of the 27th Nigerian Economic Summit on Lightning Nigeria: Solution framework for power recovery held in Abuja.
He further went on to advise Nigeria’s economic managers to quickly assemble potent strategies to harness the robust potential of the country.
He went on to say that the medium-term development plan for 2021-2025 is set on the development agenda for sustainable growth driven by new and emerging sectors. He claimed about three million Nigerians come of working age yearly, but surveys have shown that they aspire to go abroad to earn a better standard of living.
Per Capita Income is an Economic indicator that indicates the average income earned per person in a country in a specified year. It is calculated by dividing the country’s total income by its total population. In 1981, according to World Bank data, Nigeria’s per capita income was $2,180.2 and per capita income was $2,097 in 2020, meaning there has been no significant change in four decades.
Earlier in the session, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed called for a paradigm shift in running the country’s economy through comprehensive and targeted reforms, a reorientation of national values, and a radical shift in attitudes to taxation and public financial management.
She said, “This is consistent with the focus of this administration on targeted investment in critical infrastructure and social development.”
The Nigerian Economic Summit is the flagship event of the Nigerian Economic Summit Group (NESG) and it is organized in collaboration with the National Planning Commission (NPC). The Nigerian economic summit has consistently focused on job creation, small and medium-sized enterprises (SME) growth, competitiveness, dismantling the pillars of corruption, encouraging sustainable growth and development, and aligning home-grown long-term agenda with the UN sustainable development goals. The 27th Nigerian Economic Summit has the theme Securing our Future: The Fierce Urgency of Now.
East African Countries to Discuss Economic Recovery and Investments Promotion this Week in Kigali
More than 100 decision-makers and economic stakeholders will gather in Kigali this week to discuss the road to social and economic recovery and how to attract investments in East Africa. The meeting known as the 25th session of the Intergovernmental Committee of Senior Officials and Experts (ICSOE), will take place from 27 to 29 October 2021.
The ICSOE is the annual gathering of the office for Eastern Africa of the UN Economic Commission in Africa (UNECA) organised in collaboration with the Rwanda Ministry of Finance and Economic Planning. The theme of this year’s meeting is: “Strengthening resilience for a strong recovery and attracting investments to foster economic diversification and long-term growth in Eastern Africa”.
Dr Mama Keita, Director of UNECA in Eastern Africa said that the Covid-19 pandemic has weakened the economic conditions of all countries in the region. She stressed that the ICSOE meeting will provide a platform for various stakeholders from governments to have a conversation with experts and private sectors on the needed economic recovery and on how to re-ignite the engines of trade and investment.
Dr Uzziel Ndagijimana, Minister of Finance and Economic Planning said that this meeting is timely and significant. “This is the time for Rwanda to discuss with other countries of the region the potentials and the ability to rise and be responsive to the socio-economic challenges, exacerbated by the Covid-19 crisis.
According to Ms Keita, the African Continental Free Trade Area (AfCFTA) is undoubtedly critical to support the recovery from the severe adverse impacts of the Covid-19 pandemic, increase the economic multiplier in the region and will help countries to build back better, grow their economies and create jobs that foster inclusive growth.
The participants at the meeting will discuss thematic issues such as deepening Regional Value Chains, environment for investment Opportunities and Interlinkages between peace, security and development.
The subregional office for East Africa of UNECA serves 14 countries: Burundi, Comores, RD Congo, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Rwanda, Seychelles, Somalia, South Sudan, Tanzania and Uganda.
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