According to Simbi Wabote, executive secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Nigeria now keeps $7 billion out of the $21 billion it spends on the oil and gas sector each year.
On the sixth anniversary of his initial appointment as the Executive Secretary of the Board, the head of the NCDMB revealed this in a speech. He noted that the capacity of the Nigerian sector had been roughly 3% prior to the establishment of the Board in 2010.
“The yearly spend before now in the industry was $21 billion year-on-year. So, today, we have clawed back $7 billion of industry spending into the country every year. A typical example is the Egina project. Egina which is almost $21 billion, majority of the fabrication was done in-country including topside integration, which was never done in Africa,” he said.
He added that the Board aimed to get $14 billion by 2027, saying: “The truth is, you cannot achieve 100 per cent Local Content. It is not possible because you also have to depend on a lot of countries in terms of intellectual property rights, and you cannot manufacture everything. So, the 30 per cent we are leaving is for what we get outside. What used to happen was that 95 per cent of everything was done outside this country.
“The $7 billion is not the foreign direct investment (FDI). It is different. What we have done is that we have retained that $7 billion in the country. What FDI in the oil and gas industry has attracted in that period is almost $60 billion. The retention is about $7 billion year-on-year in terms of the $21 billion that you spend in the industry. So, it’s important to differentiate these two things.”
The head of the NCDMB went on to say that although the seven ministerial regulations presented to the Board by the Minister of State for Petroleum Resources were not entirely new, they were largely created to encourage the adoption and compliance with local content requirements.
“The regulations only try to address some of the lacunae that we saw within the NOGICD Act. An example of such a lacuna is the process of prosecution. If you look at the Act itself, it says that, upon conviction, the decision is to cancel the project or to fine the culprit as it were. But when you look at the word, ‘upon conviction’, which means you have to go through the court processes and that will take an eternity to get a conviction of any culprit who has breached the provisions of the Act. So what the regulation did was come up with administrative sanctions as a way of ameliorating the legal process to get a conviction. So most of the regulations are not new,” he stated.
Wabote made a suggestion that the oil and gas business should actively include the insurance sector in providing the needed insurance.