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1% of oil industry contracts to fund Nigerian Content Fund

The Federal Governnment has disclosed that one per cent of every contract awarded in the Nigerian oil and gas industry is to be paid into the Nigerian Content Development Fund in accordance with the Nigerian Content Act recently passed into law.

Disclosing this on Thursday after inspecting the pipe threading yard of Botro Marine & Oil Services in Onne, Rivers State, the Acting Executive Secretary of the Nigerian Content Monitoring Board, Engr Ernest Nwapa explained that the fund would be deployed specifically for developing the capacity of Nigerian service providers in the oil and gas sector.

According to him, the fund would be managed by the board of NCMB and was different from the $350 million Local Content Fund which was put together by the Nigerian National Petroleum Corporation in 2007 to serve as a working capital for Nigerian companies that got service contracts in the oil and gas industry.

“In this case, you need to demonstrate the bankability of an investment and the board will begin to talk to you. You are going to show a business plan and prove that the investment will be able to repay the loan.” he said.

“The fund will not be managed by engineers or officials of the board. It will be managed by a proper fund manager, with international best practices, so there is no question of utilising the find for what it is not meant for.”

Nwapa further explained that the vision of the Nigerian Content Monitoring Board was to grow the funds and use it to attract other financial players who would leverage on it, such that Nigerian service providers would do business knowing that the fund was available for them to use.


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