Lagos — A new Governing Council for the Nigerian Content Development and Monitoring Board was inaugurated in Abuja last week by the Minister of State for Petroleum Resources, Chief Timipre Sylva at a brief ceremony which makes history on many fronts. This is the 3rd Governing Council that is assuming office in a year in which the NCDMB turns 10, and its composition marks a milestone in gender diversity as it ushers in the first female member.
The Council comes at a time of tears and troubles with the COVID-19 pandemic implanting fatal footprints on the global economy, and slowing oil and gas production. Members of the Council will discover that the assignment facing them is not a walk in the park. The Governing Council is an important organ of the NCDMB, and is empowered by the Nigerian Content Act to, among other things, “manage and superintend the affairs of the Board and make rules and regulations” for its “proper functioning.” The Minister of Petroleum, in this case, President Muhammadu Buhari, is the chairman of the Council while the Executive Secretary of the NCDMB, Engr. Simbi Wabote is the secretary. The other members are the history-making Mrs. Peace Oyanbo Owei from the Ministry of Petroleum Resources, Mr. Nicolas Odinuwe, representing the Petroleum Technology Association of Nigeria (PETAN), Engr. Farouk Sa’id, representing the Nigerian National Petroleum Corporation (NNPC) and Mr. Olorundare Thomas, representing the National Insurance Commission (NAICOM.) The appointees will initially serve for four years and eligible for a second and final tenure.
Inaugurating the new Council, Chief Sylva reminded the members that they were “coming on board at a very novel time in the history of mankind and downturn in the activities of the oil and gas industry.” And the Federal Government expects them to support efforts to create jobs through local content. The Governing Council can take inspiration from the initiatives of the NCDMB which have ensured that an increasing number of indigenous operators now produce more than 15% of oil and 60% of domestic gas in Nigeria. But with the impact of COVID-19, the Council and indeed, the NCDMB, face the urgent challenge of improving local content delivery in an economy which experts reckon is heading for recession. Already, the Nigerian government has cut revenue estimates from crude oil exports from N2.64 trillion to N254.2 billion, and reduced the crude oil benchmark in the 2020 budget from $57 to $30 per barrel.
The Council must come to terms with this paradox: how do you continue to develop and embed Nigerian content in a sector that is struggling? The NCDMB partly responded to the downturn by cutting interest rates and extending loans tenors to beneficiaries of the Nigerian Content Intervention Fund (NCI-Fund,) being managed for the Board by the Bank of Industry (BoI.) As the Minister of State for Petroleum pointed out at the inauguration, “In the midst of so much uncertainty around the COVID-19 pandemic and instability in the world oil markets, we must look inwards to explore all the opportunities to further diversify and insulate our economy from external shocks.”
But perhaps, the greatest challenge of the Council is the NCDMB 10-year strategic roadmap which was launched in 2017 to drive more in-country value from the country’s hydrocarbon resources. The cardinal aim of the roadmap is to achieve 70% Nigerian content in the oil and gas industry by 2027. If this target is met, Nigeria will be able to domesticate petroleum refining and manufacturing of industry requirements, get more value from gas and take Nigerian operators to higher heights in the upstream, midstream, and downstream sectors of the industry. All of these would generate about 300,000 jobs and ensure annual capital retention of $14 billion with the spin-offs that these could trigger.
The expansion of the scope of the NCI-Fund should be another area of interest for the Council. The BoI has so far disbursed a total of US$158.46 million and N7.31 billion to 26 beneficiaries representing 91 per cent of the NCI-Fund, covering manufacturing, asset acquisition, contract finance and loan refinancing. Regardless of this cheerful news, the Community Contractors Loan Scheme, which is meant to extend the same financial support to contractors from communities, has yet to take off. This is the time to do something about this imbalance. If not now, when? If not NCDMB, who?
The process of developing and embedding Nigerian content in the Nigerian oil and gas industry has aptly been described as a marathon, not a dash. It should therefore not surprise or worry anyone if the marathon sometimes straddles hills and valleys. After all, the Nigerians at the NCDMB – whether in the Governing Council, management, or general body of staff – appear to know the terrain very well.