Any nation or sector of the economy that seeks to implement Local Content policies successfully must deploy certain programmes such as Capacity Building initiatives, Funding and Incentives and Research and Development, Gap Analysis, Regulatory Framework and Access to market.
The Executive Secretary of Nigerian Content Development and Monitoring Board (NCDMB) Engr. Simbi Kesiye Wabote identified these conditions recently in a presentation he delivered to the 6th Ugandan International Oil and Gas Summit titled “Developing A World Class Local Content Structure.”
Drawing from the successful implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, he underlined that entrenching a sustainable Local Content practice leads to development, empowerment, prosperity, and creation of employment opportunities for the populace.
Providing details, he explained that an enabling regulatory framework backed with the appropriate legislation is fundamental to effective Local Content practice as it sets the framework and boundaries for all practitioners in the sector.
According to him, the second factor is the baseline and periodic gap analyses to determine gaps that need to be closed in the areas of skills, facilities and infrastructure. He added that “the oil and gas industry keeps evolving and regular reviews and monitoring of local content goals show where capacities have been met, current gaps, and where the capacity upgrade is required to guide the deployment of resources and investment decisions.”
He underscored the need to strike a balance between aspirational goals and realistic target setting and to put in place credible action plans and initiatives to close the gaps and understanding that all gaps cannot be closed overnight, hence the need to prioritize areas of high impact and deploy implementation measures.
Wabote also stressed the importance of developing in-country capacities and capabilities, catalyzing local manufacturing and infrastructural development as well as Human Capacity Development.
He hinted that implementation of major projects is important in the development of in-country capacities and capabilities, while Capacity Development Initiatives (CDI’s) are important tools in closing identified capacity gaps. He added that Project Based trainings are an important element of Human Capacity Development, while major projects are important to sustain utilization of established capacities and attract additional investments for growth.
He pointed out that Funding and Incentives are important to implementing Local Content programs, developing infrastructure, attracting new investments, and keeping existing businesses afloat where required.
Dwelling on funding, Wabote explained that one percent of the value of contracts awarded in the upstream sector of Nigeria’s oil and gas industry is pooled into the Nigerian Content Development Fund (NCDF), adding that the NCDMB had deployed the funds in the launch of the $350 million Nigerian Content Intervention Fund (NCIF) in partnership with the Bank of Industry and NEXIM Bank. Other utilizations of the NCDF include ongoing development of Nigerian Oil and Gas Parks Scheme as manufacturing hubs, Construction of the new 17-storey headquarters building, 1000-seater international conference center and Partnership with project promoters in the establishment of modular refineries, LPG terminals, manufacturing of LPG Cylinders, and others.
The Executive Secretary underscored the importance of that Research and Development, hinting that Local Content thrives where there is robust R&D guideline to drive the development of home-grown technology. He added that “no nation can really develop by being a consumer of other countries technology and intellectual properties.”
He further revealed that NCDMB had focussed on Research and Development in the oil and gas sector with the launch of the R&D Roadmap anchored on eight key pillars and 42 initiatives and the launch of a $50million Nigerian Content Research & Development Fund to drive basic research, commercialization of research breakthroughs, the establishment of Centers of Excellence, and to sponsor University endowments.
He pointed out that Access to the Market is also a critical parameter for developing Local Content because all policies, laws, capacities and R&D efforts would become stifled if there was no outlet to receive a reward for growth and sustenance.
He explained that the Board had enabled Access to Market by ensuring patronage of goods and services that are developed from established local capacities using the ‘right of first refusal’ principle. He listed other tools such as the Nigerian Content Plan, the Nigerian Content Compliance Certificate, and the Nigerian Content Equipment Certification.
The NCDMB boss noted that the experience garnered by the local businesses, and the capacities developed over the years have positioned them for the opportunities that would be realized from the African Continental Free Trade Agreement.