$100m NCIF ready for use soon
The Nigerian Content Development and Monitoring Board (NCDMB) has warned contractors in the upstream segment of the petroleum industry to remit their contributions to the Nigerian Content Intervention Fund (NCIF).
Its Executive Secretary, Simbi Wabote, at a stakeholders meeting on NCIF remittances in Lagos, reminded stakeholders that the Nigerian Content Act provides that one per cent of every contract in the upstream sector of the oil and gas industry should be deducted at source and paid into the Fund.
Many upstream companies, perhaps out of ignorance of the process of remittance, have not been remitting their contributions, hence, the stakeholders meeting. The forum was to recreate awareness on the need and how to remit contributions to the Fund.
Wabote noted that the Act also gives the Board the mandate to manage the Fund and deploy it for projects, programmes and activities directed at increasing content in the oil and gas industry.
He said: “NCDMB focused the early years of the Act in collections, putting in place an operating model for the utilisation of the Fund, establishing the Nigerian Content Development Fund (NCDF) Advisory Committee for efficient governance of the Fund; and creating confidence and trust of Industry stakeholders.
“The Board opened up the Fund for utilisation from 2013, based on the approved operating model that segmented 70 per cent of the Fund to financing commercial interventions and 30 per cent for developmental initiatives and activities carried out by the Board on behalf of the industry.
“Therefore, this forum is convened to engage stakeholders on the channels for remittance of Funds into NCDF account with the Central Bank of Nigeria (CBN). As most of you are aware, the NCDF was established by Section 104 of the Nigerian Oil & Gas Industry Content Development (NOGICD) Act of 2010. The Act provides that one per cent of every contract in the upstream sector of the Nigeria oil & gas industry shall be deducted at source and paid into the Fund.
“Under commercial interventions, the Fund was leveraged to provide 30 per cent partial guarantee to commercial banks for loans granted to oil and gas service companies towards financing project execution, asset acquisition or facility upgrade. It also provided 50 per cent interest rebate on performing loans. Beneficiaries of the Fund include Ladol, Starz and Vandrezzer.”
According to the NCDMB chief, developmental intervention covered Capacity Development Initiatives (CDIs) including training programmes, NCCF administration, establishment of NOGICJQS, establishment of oil and gas parks, direct equity participation by the Board in high impact projects as well as compliance monitoring activities carried out by the Board on behalf of the industry.
He stated that the introduction of the Treasury Single Account (TSA) policy by the Federal Government and the need to deepen accessibility of the Fund for critical activities informed the need to re-engineer the Operating Model of NCDF.
The Board has fully complied with TSA policy by opening Naira and foreign currency accounts in CBN, into which all NCDF remittances are to be made, stressing that NCDMB does not operate account in any commercial bank, contributors are therefore expected to pay all remittances into the NCDF accounts in CBN, he added.
To enhance accessibility to the Fund, the Board in July 2016 signed a Memorandum of Understanding (MOU) with Bank of Industry (BoI) to establish the Nigerian Content Intervention Fund (NCIF). NCIF provides long term facilities to contributors to NCDF on the basis of all, in eight per cent interest rate.
“As soon as we finalise the process for release of the initial $100 Million (N31 Billion) to BoI for the pilot phase, contributors to the Fund with manufacturing proposals in the oil and gas industry can approach BoI for the NCIF facility, which has a single obligor limit of$10 million and tenor of up to 5-10 years,” he said.