‘How Nigeria lost $380bn, 2m jobs in oil sector in 50 years’

22 December 2011, Sweetcrude, ABUJA – Mr. Ernest Nwapa, Executive Secretary, Nigerian Content Development and Monitoring Board, spoke extensively on the benefits of building local content in the Nigerian oil and gas sector at a Capacity Building Workshop organised for members of the Local Content Committee of the Nigerian House of Representatives in Abuja.

He told the lawmakers that Nigeria lost $380bn and two million jobs to foreigners in the oil and gas industry between 1956 and 2006.

According to a statement by Mr. Obinna Ezeobi, the Public Affairs Officer of the organisation, Nwapa also told the lawmakers that his board was implementing the Nigerian Content Act to reverse a situation whereby the Nigerian oil and gas industry merely exported job opportunities and aided capital flight from the economy between 1956 when oil was discovered and 2006 when the Nigerian Content Policy was introduced.

“The industry exported two million job opportunities and suffered an estimated capital flight of about $380bn during the 30-year period, with over 95 per cent of industry annual budget expended abroad,” he said.

He explained that if the successes being recorded in reversing the trend were consolidated, by 2020, Nigeria would have become the hub for oil and gas services and an estimated $191bn could be retained; 300,000 new job opportunities created in engineering, sciences and technical services and over 65 per cent of industry expenditure domiciled.

Drawing the attention of the committee members to some policies and practices which impaired local content development in Nigeria such as the Temporary Import Permit (TIP) for marine vessels, he informed that the TIP not only discouraged the ownership and registration of marine vessels in Nigeria but also gave advantages to foreign vessel owners, who were allowed to pay a token to the government for bringing in their vessels.

This, he said, promotes the situation whereby vessels that work in Nigeria sail to neighbouring countries to meet their TIP conditions and undergo repairs concurrently whereas such maintenance can be done at shipyards in Nigeria.

Explaining how the board was implementing its strategies, the executive secretary said emphasis was being placed on areas with high impact on employment, retention of industry spending, technology transfer and value added services.

He identified the marine sector as one of such areas, noting that it used to be dominated by foreign-owned vessels and rig operators, resulting in $3bn capital flight.

But, the board has now come up with marine vessel and rigs ownership strategy which has begun to ensure a change in the status quo, according to him.

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  • Ben Ndubuisi

    I commend the Executive Secretary and his Committee in the good work they are doing.However, I want to encourage them to look into the Policy that allows the Oil Companies the Priviledge of Withholding information on new Oil Wells, if there is such a policy. Many Oil Producing Communities, Local Govts and States are been short-changed by the Oil companies’ refusal to disclose the quantity and quality of oil produced in the areas of their interest. The affected communities are not gazzetted as oil producing. Orsu-Obodo in Oguta LGA of Imo State is an example and Addax Oil Producing and Dev company(SINOPEC) is the Culprit.