The Bank of Industry ( BOI) has partnered the the Nigerian Content Development and Monitoring Board (NCDMB) to launch a $100 million fund aimed at boosting local content in Nigeria.
According to the acting Managing Director, BOI, Mr. Waheed Olagunju, the fund provided by NCDMB to be managed by the development finance institution ( DFI) will help Nigeria reduce its dependence on foreign expertise and technical know-how, pointing out that Nigeria has been importing skills and technical knowledge for the past 60 years when a lot can be done by Nigerians which he said would go a long way to drive the nation’s industrialisation base and improve local productivity and labour workforce.
Olagunju during the official launch and Memorandum of Understanding ( MoU) signing ceremony for the Nigerian Content Intervention Fund (NCIF) said, “We know that with this partnership, a lot of enterprises will be promoted and also have developmental impacts which includes job creation. We also need to build the capacity of artisans so that they can take up jobs. We need to build up their skills. We are also trying to revive the value of vocational skills in Nigeria. There are lots of jobs in the country but many of the youths are unemployable because they lack the skills. This is why I keep saying the unemployment situation in Nigeria is artificial because if we do the right thing, there are lots of jobs available for those willing to work.”
In his words, “Many industrial companies have established but have had to import skilled workforce from outside Nigeria. We are talking about building local content not only in industries but also in terms of labour. We are also working hard to ensure that we maximise the benefits of this initiative.”
He said the DFI is positive and optimistic that the MoU would cut across the lives of millions of Nigeria, saying that the partnership his is a natural partnership with NDCMB is aimed at transforming the nation’s industrial sector.
“Our strategy going forward is a commodity based industrialisation, where we are talking of adding value to Nigeria natural resource endowments. We are more of an agricultural country than oil. We have vast solid mineral resources. We are not doing much with the oil and gas, we are not adding as much value as we should relative to what other Organisation of Petroleum Exporting Countries (OPEC) are doing with their petroleum resources,” he said.
Describing the fund, the Regional Head, South South, Mr. Balarabe Hassan, said the fund will be used to finance existing and intending manufacturers, oil and gas service companies and other Original Equipment Manufacturers (OEMs) in the Nigerian oil and gas industry.
He said the NCIF will help these manufacturers procure fixed assets, working capital, leasing of industrial and business equipment and marine vessels.
He said the features of the fund will include a single digit interest rate of 8 per cent with a tenor range from 1 to 10 years, a moratorium maximum of 12 months from date of loan disbursement and a maximum $10 million obligor limit.
He added that the development finance institution ( DFI) is a specialised bank set up to promote balanced industrial and economic development and therefore mobilises funds for short, medium and long-term loan facilities from within and outside the country for the promotion of Micro, Small and Medium Enterprises ( MSMEs) and large scale industrial enterprises.
The acting Executive Secretary, NCDMB, Mr. Patrick Obah, said the access to competitive priced finance by the Nigerian oil and gas service providers is a critical success factor in capacity development, stating that the MoU between both parties reflects the strong determination to lead the process of industrialisation by closing the gap of financing of projects that have high prospects of creating employment while also adding value to our natural resource endowments.
“The $100 million injected into the NCIF to be managed by the BOI will bring about an array of benefits and let me also say that transactions that have been already consumated under the previous agreement will not be terminated but managed,” he said
He added that the Nigerian content will continue to work towards building capacity for the local service providers to achieve their full potentials in order to invest in new capabilities, develop technology and acquire skills.
“I will like to commend the team that restructured the NCDF operating model and also thanking the BOI for the signing of the MoU and while also urging industries and stakeholders to access the fund,” he said.
A member of the Nigerian Content Development Fund (NCDF), Advisory Committee, Mr. Mina Oforiokuna, said the purpose of the fund is clear, maintaining that there are many people with good and sound projects but cannot access funds to buy equipment due to bank’s negative attitude towards lending to the manufacturing sector.
“We must have a deliberate policy and what the NCDMB have started is laudable but it is not enough. $100 million is small money in the oil and gas industry. I want to use this opportunity to tell you that your board must fund this initiative with about $600 million dollars. With your partnership with BOI, we can set up the biggest shipping yard in Nigeria and also taking local content to about 75 per cent,” he said.
“There are so many reasons why the funding model in the past failed. This was because there were too much bureaucracy. This process must be serious, straight forward and transparent. It should also be available for only serious genuine businesses and if otherwise, the objective of the fund is defeated. We have to leverage on proven Nigerian companies because if a company is balanced it will carry many other companies. Capacity building in Nigeria must not be compromised. This is a very serious business. We must walk the talk and with the $600 million, we can build the biggest shipping yard, we can create about 12000 jobs and create more entrepreneurs to make our country great,” he said.