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From $380bn Loss in 50 Years, Nigeria’s Oil Industry Begins In-country Annual Retention of $8bn


From a whopping $380 billion loss in capital flight due to the absence of an enabling law for retention of capital in the oil and gas industry, Nigeria currently has an annual in-country retention of $8 billion under the Nigerian Oil and Gas Industry Content Development (NOGICD) Act. Executive Secretary of Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Wabote, stated this in Lagos during a meeting with editors.



Wabote revealed that about two million jobs were also lost during the 50 years that the country’s oil and industry operated without a capital retention law. But he said at least 50,000 jobs had so far been created with the implementation of the NOGICD Act.


Over the past 11 years, Wabote stated that the level of Nigerian content in the oil industry, which was about five per cent before the enactment of the act in 2010, had increased to 26 per cent in 2016 and 42 per cent as at December 2021.



He explained, “Before now, there was revenue focus with little emphasis on in-country value addition, with massive capital flight of over $380 billion and an estimated two million job loss over a 50-year period, while the local content in the oil and gas industry was less than five per cent.”


Wabote explained that NCDMB launched a Nigerian content 10-year strategic roadmap in 2017, with the target to achieve 70 per cent Nigerian content by 2027. As part of this goal, the board, he noted, would catalyse the creation of 300, 000 direct jobs in the oil and gas industry and linkage sectors and enable the retention of $13 billion out of the estimated annual $20 billion spend in the oil and gas industry.


The NCDMB helmsman hinted that a pointer to the marked improvement in Nigerian content implementation was that the local economy used to retain little or nothing from the annual oil industry spend of $20 billion before the Act. The $8 billion in-country retention per year was possible, according to him, due to the development of critical capacities and assets by local oil and gas service companies and increased domiciliation and domestication of industry operations.


Wabote said Nigeria had also moved from near zero participation in the operations side of the oil and gas sector to the point where indigenous operators, such as Seplat, Aiteo, Eroton, and others, were now responsible for 15 per cent of the country’s oil production and 60 per cent of domestic gas supply.


Other major accomplishments of Nigerian content implementation included the establishment of two world-class pipe mills and five pipe coating yards, enabling Nigerian firms to fabricate more than 250,000 tonnes of steel per year, and ownership of more than 40 per cent of marine vessels used in the industry, he stated.


Wabote added that over 10 million training man-hours had been delivered via the board’s human capacity development programme, thereby enabling the indigenous workforce to sustain oil production at the peak of the COVID-19 pandemic lockdown.


Providing details of the board’s credit facilities to the oil and gas industry, Wabote said NCDMB had inaugurated a $50 million Nigerian Content Research and Development Fund to drive basic research, commercialisation of research breakthroughs, establishment of research centres of excellence, and sponsorship of university endowments. He added that the board floated a $50 million special loan product for women in the oil and gas business to enable empowerment of the womenfolk in the industry, managed by Nexim (Nigerian Export-Import) Bank, and established another $30 million working capital fund to support oil and gas service companies.


The NCDMB executive secretary announced that the agency recently secured the approval of its Governing Council to set up a $50 million fund for a manufacturing product line, to be dedicated to companies that would operate in the Nigerian oil and gas parks. He said this was being constructed by the board in Bayelsa and Cross River states, explaining that the beneficiaries of the fund would have to be engaged in the manufacturing of equipment components used in the oil and gas industry and linkage sectors.


Wabote stated that NCDMB convened the breakfast meeting with the managements of the media organisations to enable senior members of the media understand the importance of Nigerian content to the economy.


He added that the COVID-19 pandemic made humanity realise that every economy needed to develop local capacities and capabilities in the core sectors, hence, all hands must now be on deck to push the local content narrative.


He charged media practitioners to uphold the ethics of the profession, noting that Nigerians depend on the media for many decisions.


However, Wabote regretted that some online media platforms were undermining the federal government’s intentions of bringing in technocrats and professionals to serve as appointees through targeted and unwarranted attacks.


Speaking at the event, Manager, Corporate Communications, NCDMB, Mr. Esueme Kikile, noted that media practitioners were key partners in the implementation of the NOGICD Act. Kikile solicited the support of the media to curb the incidence of fake news and libellous publications.


He assured the media of the board’s continuous partnership and support.

Culled from THISDAY

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