Nigerian Content Act: The journey so far

Nigeria's journey towards achieving compliance with the Nigerian Local Content Act has been nothing short of remarkable. The Executive Secretary of the Nigerian Content Development and Monitoring Board, Simbi Wabote, highlighted the significant progress made in a recent interview with CNBC Africa. Wabote emphasized that compliance with the Act has increased to 28 per cent, a significant leap from the mere 3 per cent recorded in 2010. This growth is attributed to deliberate efforts to boost local fabrication and manufacturing capacity in the oil and gas sector. Wabote shed light on the transformative impact of the Nigerian Content Act on the country's ability to fabricate essential components domestically. He pointed out that previously, Nigeria relied heavily on imported materials for the oil and gas sector, with almost 90% of construction materials being sourced from international markets. However, the situation has changed dramatically in recent years. Today, Nigeria boasts the capacity to produce approximately 60,000 metric tons of fabrication work locally, a testament to the success of the Act's implementation. One of the marquee achievements highlighted by Wabote is the integration of Floating Production Storage and Offloading (FPSO) units within the country. He underscored the significance of this accomplishment, noting that Nigeria is now capable of handling massive projects that were previously outsourced. The establishment of local manufacturing facilities for essential items like pipes has further solidified Nigeria's position as a key player in the oil and gas industry. As Nigeria looks ahead to further enhancing its local content compliance, Wabote outlined strategic initiatives that are underway. A 10-year strategic roadmap has been devised to set ambitious targets for the sector, with a goal to reach 70 per cent compliance by 2027. To support this vision, the Nigerian Content Development and Monitoring Board is working on establishing dedicated industrial parks focused on manufacturing for the oil and gas sector. These industrial parks will not only boost local production but also address critical challenges such as power supply by creating captive electricity generation capabilities. In addition to infrastructure development, access to funding remains a key priority for promoting local content in Nigeria. Wabote acknowledged the financing challenges faced by local entrepreneurs and emphasized the importance of providing affordable funding solutions. The Nigerian Content Development Fund (NCDF) has been established to offer loans at single-digit interest rates, enabling companies to expand their capabilities and compete effectively in the industry. By making the fund accessible in a transparent manner, Wabote aims to foster a culture of financial inclusivity and accountability among stakeholders. Despite initial obstacles in accessing the fund, efforts are underway to streamline the application process and enhance transparency. Wabote highlighted the ongoing collaboration with the Bank of Industry to ensure a structured and efficient mechanism for disbursing the funds. Moving forward, the Nigerian Content Development and Monitoring Board plans to regularly publish updates on fund beneficiaries to promote accountability and track the impact of financial support on local businesses. The journey towards achieving higher compliance with the Nigerian Local Content Act is a testament to Nigeria's commitment to driving economic growth, industrial development, and job creation within the oil and gas sector. By leveraging local talent, resources, and capabilities, Nigeria is poised to further enhance its position as a key player in the global energy market.