Wabote: Why Some Upstream companies Refused to Contribute to Local Content Fund
As some upstream companies operating in Nigeria’s oil and gas industry are concerned about the judicious utilisation of their one per cent contributions to the Nigerian Content Intervention (NCI) Fund, the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Wabote has given an insight into why some companies have refused to contribute to the fund.
The NCI Fund is a pool made available by the NCDMB to meet the funding needs of manufacturers, service providers and other key players in the Nigeria’s oil and gas industry.
In line with Section 104 of the Nigerian Oil and Gas Content Development (NOGICD) Act of 2010, upstream operators in the oil and gas industry contribute one per cent of the value of every contract in the upstream sector into the Nigerian Content Development Fund (NCDF) from which the NCI Fund was created.
It was however, gathered that some upstream companies do not contribute to the NCI Fund.
But speaking to THISDAY on his strategies to make these companies to comply with the NOGICD Act by contributing to the Fund, Wabote stated that ignorance and lack of adequate knowledge of the implications of not contributing were largely responsible for the attitude of these companies.
Wabote also acknowledged that some of the companies do not also understand the mechanism for contributing to the fund.
“While the people who are contributing worry about the fund they contributed, a lot of Nigerian companies do not contributing as enshrined in the law. This board will look at strategies with which we will make them comply with the provisions of the Act. That some are not contributing might be out of ignorance; some are not contributing due to their lack of understanding of the implication of not contributing and the mechanism to make those contributions. So, we are looking at that process and I can assure you that within the shortest possible time, we will reach out to all those companies that are not contributing and then make them comply with the laws of the land by making them to contribute. But having said that, I think it is also important to give them comfort that the Fund will be judiciously utilised for what it is meant for,” Wabote explained.
He further stated that the Fund has grown since 2010 to approximately $600 million.
According to him, the fund has benefitted about six Nigerian companies that tapped into it for capacity development.
Wabote however declined to reveal the identities of the six companies.
“But I must say that it is not
directly giving money to those six Nigerian contractors; it is about guaranteeing some of the loans that they got from the banks because we are not a funding institution. We guarantee the loans they got from the banks. Not much has been expended from that fund for capacity development,” he added.
He said part of the strategies of the new board was to come out with very transparent process with which genuine Nigerian contractors involved in the oil and gas sector will have access to that fund.