The Nigerian Content Development and Monitoring Board, NCDMB, said it is working on strategies whereby up to 65 percent or $191billion of the oil and gas industry spend is retained in country by 2020.
The strategies could also result in the creation of about 300,000 new jobs in the areas of engineering, sciences and technical services,
The Executive Secretary of the Board, Mr. Ernest Nwapa, disclosed this at a Capacity Building Workshop recently organised for 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 by the House Committee members to understand practical issues bordering on the implementation of Nigerian Content.
Nwapa said the move was drawn from concern over the increasing rte of capital flight and job losses in Nigeria’s petroleum industry.
He said the industry exported 2 million jobs 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.
Accordingly, he said the Board was implementing the Nigerian Content Act to reverse the prevailing situation whereby the petroleum industry merely exported jobs and aided capital flight from the economy right from 1956 when oil was discovered and 2006 when the Nigerian Content Policy was introduced.
He noted that if the successes being recorded by the Content Act were consolidated, Nigeria will become the hub for oil and gas services by 2020.
The NCDMB scribe also drew the attention of the legislators to some existing policies and practices, which hinder local content development in Nigeria, such as 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 gave advantages to foreign vessel owners, who are allowed to pay a token to the government for bringing in their vessels.
Furthermore, he said the permit promotes the practice whereby vessels that work in Nigeria sail to neighbouring countries to meet their TIP conditions and undergo repairs concurrently whereas such maintenance can be done at ship yards in Nigeria.
Throwing further light on the Board’s implementation strategies, the Executive Secretary said emphasis is now being placed on areas with high impact on 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 owners as well as crew vessels and rig operators, resulting in $3bn capital flight.
However, he disclosed that the Board has now come up with marine vessel and rigs ownership strategy, which has begun to ensure a change in the status quo.
Nwapa also noted that indigenous players were 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 additional $1.5bn in the next two years.
He further noted that 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 capacity in excess of $4billion per annum with about 250,000 employment and training opportunities.
Another focus area for the Board according to Nwapa is the Original Equipment Manufacturing Strategy, which requires manufacturers of equipment used in the industry to domicile certain components in country, starting from an initial minimum threshold of 10 per cent value of the equipment.
The strategy will ensure that the manufacturers set up facilities in Nigeria and employ Nigerians in the manufacture of components, which will be used in oil and gas projects.
Responding, the lawmakers promised to collaborate with the NCDMB to ensure that operating and service companies in Nigeria complied with the provisions of the Nigerian Oil and Gas Industry Content Development Act 2010.
The Chairman of the House of Representatives Local Content Committee, Hon Honourable Asita, commended the Board for organising the workshop, adding that such interactions be held on regular intervals to enable the Committee fashion out appropriate legislative support for 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 lawmakers for its effective implementation.
The Committee Chairman further suggested that the National Assembly might consider making similar legislations to cover other critical sectors of the economy like Information Technology, Power, Agriculture and Construction.