*Nigeria lost $360bn, 2 million jobs in 30 years
20 December 2011, Sweetcrude, Yenagoa – The House of Representatives and the Nigerian Content Development & Monitoring Board will collaborate to ensure that operating and service companies in Nigeria comply with provisions of the Nigerian Oil and Gas Industry Content Development Act 2010.
This was the key resolution at the Capacity Building Workshop organised last Monday in Abuja by the Board for members of the Local Content Committee of the House of Representatives, which was constituted for the first time in this legislative session.
The workshop was part of the Board’s collaboration with key stakeholders and was organised in response to the need of the House Committee members to understand practical issues bordering on the implementation of Nigerian Content.
Also spesaking, Chairman of the House of Representatives Local Content Committee, Asita commended the Board for organising the workshop, adding that such interactions be held on regular intervals to enable the Committee to fashion out appropriate legislative support to the implementation of the Act.
He described the Nigerian Content Act as a landmark legislation that will help transform the Nigerian economy and create employment opportunities and pledged the support of the House of Reps to the effective implementation.
The Committee Chairman suggested that the National Assembly will consider making similar legislations to cover other critical sectors of the economy like Information Technology, Power, Agriculture and Construction.
The Executive Secretary of the Board, Ernest Nwapa explained that the 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.
According to him, the industry exported 2 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 noted that if the successes being recorded are consolidated, by 2020, Nigeria will 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 spend domiciled.
Nwapa further drew the attention of the Committee members to some policies and practices. which impair local content development in Nigeria like the Temporary Import Permit (TIP) for marine vessels.
He explained that the TIP not only discouraged the ownership and registration of marine vessels in Nigeria but also gives advantages to foreign vessel owners, who are allowed to pay a token to the government for bringing in their vessels.
Furthermore it promotes the practice whereby vessels that work in Nigeria sail to neighboring countries to meet their TIP conditions and undergo repairs concurrently whereas such maintenance can be done at ship yards in Nigeria.
On the Board’s implementation strategies, the Executive Secretary said emphasis is being placed on areas with high impact in employment, retention of industry spend, 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 and crew vessels and rig operators, resulting in $3bn capital flight.
However, the Board has now come up with marine vessel and rigs ownership strategy which has begun to ensure a change in the status quo.
The Executive Secretary also reported that indigenous players are currently participating fully in the smaller vessel category, thereby retaining about $1billion annual spend in Nigeria while a structured intervention for more Nigerian ownership of the larger offshore vessels has been put in place, with a potential for retaining a further $1.5bn in the next 2 years.
He said a number of indigenous players are making efforts to build and acquire vessels but needed funding support and long tenure contracts to protect their investments.
There is optimism however that the current drive by the Board will ensure that by 2020, the ownership profile in the marine sector would be more indigene driven with a retention in excess of $4 bn per annum, 250,000 employment & training opportunities.
Another focus area for the Board according to Nwapa is the Original Equipment Manufacturing Strategy which requires manufactures of equipment used in the Nigerian oil and gas industry to domicile the manufacture of certain components in the country, starting from an initial minimum threshold of ten per cent value of the equipment.
The strategy will ensure that Original Equipment Manufacturers set up facilities in Nigeria and employ Nigerians in the manufacture of component which will be used in upcoming gas revolution and oil production projects.
Other speakers at the workshop included the General Manager, Head Corporate Banking, Skye Bank, Mrs. Markie Idowu, who spoke on Financing Challenges for Nigerian Entrepreneurs in the Oil & Gas Industry and the General Secretary, Petroleum Technology Association of Nigeria, Mr. Emeka Ene.
The General Manager, Nigerian Content, Chevron, Mr. Raymond Wilcox, Barr. Bayo Adaralegbe of B.O. Babalakin & Co Chambers and the Council Member, Chamber of Shipping, Mr. Mina Oforiokuma also made presentations at the workshop.
