The Bank of Industry and the Nigerian Content Development Monitoring Board (NCDMB) have partnered to drive in-country manufacturing of oil and gas equipment .
The move is expected to increase Nigeria’s 10 per cent capacity in manufacturing oil and gas components, equipment and machinery.
The Executive Secretary, NCDMB, Simbi Wabote, at the BoI/NCDMB signing of the NOGaPs Memorandum of Understanding (MoU) in Lagos, said the partnership has made available a pool of funds to encourage in-country manufacturing, pointing out that the NCDMB and BoI are putting up funds to encourage people to manufacture in Nigeria with an attractive interest rate of 8 per cent.
“The other fund is to support businesses that want to establish themselves within the industrial parks that have been built by the NCDMB. We have two of those parks that are almost ready to be commissioned this year. We are in the process of getting tenants into those parks to manufacture oil and gas equipment in the country, so, it is highly incentivised in terms of encouraging them to establish themselves,” he said.
He noted that the fund is to encourage in-country manufacturing, maintaining that statistics show that over 98 per cent of oil and gas contracts have been awarded to Nigerians.
In his words: “Today, we pride ourselves that almost 98 per cent of the contracts in the sector are given to Nigerians, but when you drill deep into the components and equipment that are used in the industry, the manufacturing capabilities are extremely limited that we cannot even boast of 10 per cent. So, we want to up the game in manufacturing and all it requires is that the business be domiciled within the park and manufactured within the park.”
According to him, the loan scheme is incentivised with an eight per cent interest, a one-year moratorium and a five-year pay back period.
“We also have a training facility in the park itself incentivised to conduct training within the park. There are myriads of incentives that we intend to give to potential occupants of the park,” he added.
He said the park is all-inclusive in terms of security; services and power, pointing out that one of the greatest challenges for manufacturers is the ability to sustain power supply to run their operations.
“The parks located in Bayelsa and Cross River State, are powered by gas generators to guarantee 24/7 power supply. Security is also provided within the park as part of the services rendered by the park managers for potential occupants,” he assured.
Also speaking, the Managing Director, Bank of Industry, Olukayode Pitan, said so far, over 62 companies have benefitted from the Nigerian Content Intervention Fund (NCIF) $300 million facility disbursed to eligible companies to solve the funding challenge of the local supply chain in the oil and gas industry.
According to him, the beneficiaries went through a risk assessment of the bank and of the Board before the funds were disbursed, saying that the repayment ratio of the fund is close to 100 per cent with all the loans performing.
“All we are looking for are Nigerians who want to manufacture in Nigeria. The industrial parks are of high quality and meet global standards. I want to encourage manufacturers who are looking at the oil and gas sector in particular to go to the parks and take space,” he urged.
“They can count on the BoI to get facilities to manufacture in-country. Only serious companies will be able to access the fund,” he said.