‘Nigerian content not about chasing away foreigners’
Executive Secretary of the Nigerian Content Development and Monitoring Board, (NCDMB), Engr. Simbi Wabote in this interview in Yenagoa, Bayelsa State, explains how the board has fared in implementing the Nigerian content law which is targeted at increasin
What will you say are your challenges so far?
One of our key failures has been the inability of companies to access the Nigerian Content Development Fund, (NCDF), which is managed by NCDMB and used to finance projects directed at increasing Nigerian content.
Since the establishment of the NCDMB six years ago, I thought that by now companies should be accessing the fund. Regrettably, only three Nigerian vendors have been able to access it. Not being able to put that fund to use for me is a failure.
There is so much controversy over how much is in the pool of the NCDF. What is the real value of the funds and why are companies not able to access it?
We have about $600m in the fund. But I believe it should have been more. We want to conduct an audit to see who is holding our money somewhere.
It is not true that no operator has been able to access the fund. Three Nigerian companies have benefited from this fund but it’s that enough? Of course not, that is where my frustration comes. I sincerely believe we must use this fund to support the oil and gas industry.
It is a situation where when money is borrowed, it should be paid back so that others can benefit. It is not exclusively for one group. So, we must make sure we put everything right such that once we give out the fund, we will work with whoever gets it to ensure that the money is paid back. We are working to ensure that there is a transparent process on how that money will be paid back by the fund borrowers. That is why that process is taking time.
Which companies have defaulted in the implementation of the Nigerian Content Act? Are there still expatriates who are performing jobs that Nigerians can do?
I think this is not the forum to begin to list companies that have defaulted in the implementation of the Act. Are there defaulters? Am sorry I can’t give you that but if you read through the Act there is a mechanism. There are so many cases in court because people defaulted out of ignorance and total disregard for the law itself but the monitoring unit of the NCDMB is up to the task.
Even Nigerian companies that you think are complying with the Act are also defaulting and we are going after them.
On expatriates working in Nigerian companies, let me make this point. The whole idea about Nigerian content is not indigenization. The intent is not to say people should go back to their countries. Nigerians want to provide the services themselves. We also expected that these foreign companies bring investments into the country and they have to also protect their investments but the point about Nigerian content is that where you have capacities existing in-country, we will not approve for you to bring in experts.
We rigorously monitor that and where the expertise does not exist another thing we do is to ensure that there is an understudy such that when that expert leaves, he will be replaced by a Nigerian and most of the companies particularly the international oil companies and service providers hold dear to this. For every expatriate quota application that they put before us we demand to see the succession plan of that position that will be filled by a Nigerian in the next four years because most expatriate applications last for four years.
I know that most Nigerians are out there in various countries enhancing their capacities and also giving their expertise. So, at times in some of those companies you have exchange programmes where they send Nigerians to bring their people to also understand the Nigerian challenges in terms of oil and gas production.
We are very prudent and committed to ensuring that capacities that exist in Nigeria, are not given to experts. But our intent is not to say that there will be no expatriates in our oil and gas operations. The whole idea is to enhance and add value in Nigeria.
What is the level of Nigerian content as at today?
When we took measurement of Nigerian content before the law was passed, it was only three per cent. This was about eight years ago because the focus then was more of revenue generation as opposed to in-country value addition.
But today, Nigerian content is around 28 per cent. Is it where we want to be after seven years? Of course not! That is why I mentioned that we want to take stock to see where we are today in terms of the implementation of the law. Once we identify the gaps properly, we will go after those areas that will help us increase the Nigerian content in the industry.
I know people will banter numbers to say that they have awarded contracts to Nigerian companies but if you drill down to the actual value in terms of the equipment and kits, you are not going to go anywhere. Yes you have awarded it to a Nigerian company that is good but we need to ensure that those companies buy those products and services in-country by encouraging manufacturing, that is where our focus is.
How many Nigerian companies have benefitted from the local content policy since you have been on the saddle?
I know people will banter numbers to say that they have awarded contracts to Nigerian companies but if you drill down to the actual value in terms of the equipment and kits, you are not going to go anywhere. Yes you have awarded it to a Nigerian company that is good but we need to ensure that those companies buy those products and services in-country
As you are aware, I have been going round the country to commission one project or the other. The other day we were in Onne to commission the Solewant coating plant. In December, we were at the Lekki Free Trade Zone to commission a multimillion dollar state-of-the art pipe mill facility by Yulong. I was also at the Nigerian Machine Tools in Oshogbo to look at the facilities they have set up to manufacture bolts, studs, flanges for the oil and gas industry.
Most Nigerian companies are now elated because most of the contracts that hitherto go to multinationals are now given to them. As a matter of fact most of the international oil companies are trying to compile the list of contracts they have been able to give to Nigerian companies for the past 100 days. So, there are successes in terms of companies benefitting from the policy.
The point about Nigerian content is that where you have capacities existing in-country, we will not approve for you to bring in experts. We rigorously monitor that and where the expertise does not exist another thing we do is to ensure that there is an understudy such that when that expert leaves, he will be replaced by a Nigerian