NCI Fund Exceeds $500m as NCDMB Seeks Creation of African Oil Bank

Emmanuel Addeh

The Nigerian Content Intervention (NCI) Fund has exceeded $500 million, the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Wabote, has said.

Wabote spoke at the Sub-Saharan African International Petroleum Conference (SAIPEC) organised in Lagos by the Petroleum Technology Association of Nigeria (PETAN).

He indicated that the fund which is extended as low-cost credit to qualified oil and gas companies covers asset acquisition, project financing, manufacturing, working capital, loan refinancing, women in oil and gas, as well as research and development.

The NCIF, he said, is a component of the Nigerian Content Development Fund (NCDF), which is accumulated through 1 per cent deductions from contracts awarded in the upstream sector of the oil and gas industry.

Wabote added that the board was using the NCDF to catalyse the construction of modular refineries, gas processing plants, LPG terminals and bottling plants, cylinders manufacturing plants, lube oil blending plants, base oil production plant, methanol production plant, and many others.

He canvassed that a similar fund be ereplicated at the continental level and be utilised to develop huge mega oil and gas projects, particularly as world financial institutions were getting reluctant to finance hydrocarbon-related projects.

He said: “let me use this opportunity to once again canvass for the creation of an African Local Content Fund (ALCF) that could be utilised to set up a bank or finance institution to provide funding for the development of oil and gas projects in Africa.

“This is especially important against the backdrop of the reluctance and outright declaration by some banks and financial institutions to stop funding of hydrocarbon-related projects. I hope the Afreximbank and others institute a form of contribution, no matter how little, as a fund to support the continent’s need for funds.”

He explained that in Nigeria’s case, the deduction of 1 per cent of every contract awarded to any contractor, subcontractor, alliance partner or any other entity involved in any project, in the upstream sector has resulted in having a pool of funds to support various intervention programmes.

Speaking further, the executive secretary described the recent spike in crude oil prices above $90 a barrel as an excellent opportunity for African oil producers and service providers to develop new fields, ensure security of supply and affordability as well as increase revenue generation.

He noted that the price of crude oil has increased by 50 per cent in 12 months and African oil producers should use the opportunity to make plans towards energy transition, and lowering the cost of services.

Dwelling on the topic: “Sub-Saharan Africa Local Content Collaboration Strategy”, Wabote stated that an enabling regulatory framework backed with the appropriate legislation was very fundamental in local content practice.

He commended African oil producers for putting in place investor-friendly laws to promote the oil and gas industry as well as ongoing collaboration among the countries to advance the local content journey.

He noted that such laws will align with the goals of the Africa Continental Free Trade Agreement (AFCFTA) which seeks to create the world’s largest free trade area by integrating 1.3 billion people across 54 African countries, to tap into a combined Gross Domestic Product (GDP) of over $3 trillion.

He described the AFCFTA as the practice of local content on the continental level, noting that it is a huge trading and collaboration platform for the participating countries.

In his remarks, the Chairman, PETAN, Mr. Nicholas Odinuwe advocated a regional collaboration and innovation to enhance the future of energy sector.

He disclosed that the key enabler for the continent was to create a collaborative ecosystem between the local industry stakeholders alongside the AfCFTA.

Odinuwe encouraged governments across Africa to provide necessary incentives to attract private sector investments across the entire value chain which would trigger economic revolution, human capital development, and deepen local content across the continent.