To promote domestic production of oil and gas equipment, the Bank of Industry and the Nigerian Content Development Monitoring Board (NCDMB) have cooperated.
The action is anticipated to enhance Nigeria’s production capacity for machinery, equipment, and oil and gas components by 10%.
At the BoI/NCDMB signing of the NOGaPs Memorandum of Understanding (MoU) in Lagos, the NCDMB’s Executive Secretary, Simbi Wabote, stated that the partnership has made a pool of funds available to encourage in-country manufacturing. She noted that the NCDMB and BoI are putting up funds to encourage people to manufacture in Nigeria with an attractive interest rate of 8%.
“The other fund is to support businesses that want to establish themselves within the industrial parks that have been built by the NCDMB. We have two of those parks that are almost ready to be commissioned this year. We are in the process of getting tenants into those parks to manufacture oil and gas equipment in the country, so, it is highly incentivised in terms of encouraging them to establish themselves,” he said.
He emphasized that the goal of the fund is to promote domestic production, pointing out that over 98% of oil and gas contracts have gone to Nigerians.
To quote him: “Today, we pride ourselves that almost 98 per cent of the contracts in the sector are given to Nigerians, but when you drill deep into the components and equipment that are used in the industry, the manufacturing capabilities are extremely limited that we cannot even boast of 10 per cent. So, we want to up the game in manufacturing and all it requires is that the business be domiciled within the park and manufactured within the park.”
He claims that the loan program is encouraged by an 8% interest rate, a one-year moratorium, and a five-year payback period.
“We also have a training facility in the park itself incentivised to conduct training within the park. There are myriads of incentives that we intend to give to potential occupants of the park,” he added.
The capacity of manufacturers to maintain a steady supply of electricity to run their operations, he noted, is one of the biggest obstacles. He claimed that the park is all-inclusive in terms of security, services, and power.
“The parks located in Bayelsa and Cross River State, are powered by gas generators to guarantee 24/7 power supply. Security is also provided within the park as part of the services rendered by the park managers for potential occupants,” he assured.
In addition, the Managing Director of Bank of Industry, Olukayode Pitan, stated that more than 62 companies have already benefited from the $300 million facility provided by the Nigerian Content Intervention Fund (NCIF), which was established to address the funding issue facing the domestic supply chain in the oil and gas industry.
He claims that before the funds were distributed, the recipients underwent a risk assessment by the bank and the Board and that the repayment ratio of the fund is nearly 100% with all of the loans functioning.
“All we are looking for are Nigerians who want to manufacture in Nigeria. The industrial parks are of high quality and meet global standards. I want to encourage manufacturers who are looking at the oil and gas sector in particular to go to the parks and take space,” he urged.
“They can count on the BoI to get facilities to manufacture in-country. Only serious companies will be able to access the fund,” he said.
