Nigerian Content Development and Monitoring Board Announces $30m Interest from $300m Intervention Fund
The Nigerian Content Development and Monitoring Board (NCDMB) has reported a $30 million interest yield from its $300 million intervention fund, managed by the Bank of Industry (BoI). This fund has provided loans to 70 investors in the oil and gas sector, demonstrating its impact on local content development and capacity building within the industry.
Background and Purpose of the Fund
- Nigerian Content Intervention Fund (NCI Fund): A subset of the Nigerian Content Development Fund (NCDF), established under Section 104 of the Nigerian Oil and Gas Industry Content Development Act.
- Funding Source: The NCDF is financed by a 1% deduction from every contract awarded in the upstream sector of the Nigerian oil and gas industry.
- Objective: To support and enhance local content in the oil and gas sector by providing financial aid to Nigerian companies.
Performance and Impact
- Loan Distribution: $330 million loaned to 70 qualified oil and gas companies, generating an additional $30 million in interest.
- Monitoring and Review: BoI conducts quarterly project monitoring, while NCDMB holds an annual review to assess the fund scheme and its beneficiaries’ performance.
- Success Rate: The fund has been described as the most successful fund scheme in the country due to faithful repayment by beneficiaries and significant fund growth.
Controversy and Clarifications
- Allegations of Mismanagement: Minister of Petroleum Resources (Oil), Heineken Lokpobiri, alleged that under former Executive Secretary Simbi Wabote, about $350 million deposited with BoI resulted in 90% non-performing loans. However, NCDMB clarified that $300 million was deposited, and $330 million was loaned out successfully, with additional interest accrued.
Future Enhancements and Strategic Changes
– Continuous Improvement: The NCDMB is committed to further enhancing the NCI Fund’s impact and efficiency.
– Strategic Changes: Executive Secretary Felix Ogbe indicated that the board would propose strategic changes aimed at improving the fund’s effectiveness and broadening its support for local content development.
Impact on the Oil and Gas Industry
- Empowerment of Nigerian Companies: The NCI Fund has played a crucial role in transforming the industry by providing financial support, fostering local capacity development, and promoting sustainable growth.
- Local Content Development: The fund has been instrumental in driving deeper local content development within the oil and gas industry and its related sectors.
- Support for Projects: The fund has supported numerous projects, building capacities along the local value chain and fostering growth among Nigerian companies.
The success of the NCI Fund underscores its vital role in the Nigerian oil and gas industry, providing much-needed financial support to local companies and contributing significantly to the industry’s overall development and sustainability. The proposed strategic changes by the NCDMB are expected to further enhance the fund’s efficiency and impact, ensuring continued support for local content development.
