The Nigerian Content Development and Monitoring Board (NCDMB), has listed some critical strategies to strengthen indigenous participation in the African oil and gas industry, and by so doing, improve the sector’s contributions to the Gross Domestic Product (GDP) of oil producing economies in the continent.
The Board highlighted the strategies and achievements for building Nigeria’s local content capacities during a pre-conference workshop at African Energy Week 2024 (AEW): Invest in African Energy, a Local Content Masterclass, sponsored by it at the event
The Head of Project Certification and Authorization at NCDMB, Abayomi Bamidele, set the tone for the discussion with other experts by underscoring the importance of local content development.
He traced the establishment of the NCDMB back to the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010, which provides the framework for guiding and monitoring local content practices, stressing that the mandate of the Board “is to implement procedures that ensure indigenous participation in Nigeria’s extractive industry.”
In his paper, the NCDMB Manager of Institutional Strengthening, Capacity Building Directorate, Dokubo Philip Obongo, discussed the industry’s current landscape with key statistics, saying that “Nigeria holds 37 billion barrels of oil reserves, 206.53 trillion cubic feet of gas, a population of 220 million – 60% of which is working class – and a growing $374 billion GDP.”
Obongo spoke on the early challenges of exploring the potential of the industry by focusing primarily on crude oil production without adequate attention to local workforce development and machinery.
To address the challenges, the industry expert listed six key pillars for promoting local content, namely regulatory frameworks, gap analysis, capacity building, funding, research and development (R&D) and market access.
On the industry’s regulatory framework and policy regime, Obongo stressed the need for trust, transparency and clear rules, all grounded in the NOGICD Act, stressing that “the law must not only promote investments but also adapt to local realities,” he stated, noting NCDMB’s role in setting in-country value benchmarks and ensuring oversight.
He further discussed the industry’s gap analysis particularly on the importance of data, noting that “in 2010, local content levels were below 5%. Today, we have achieved 54%, with a goal of reaching 70% by 2027” due to effective monitoring and setting tangible targets.
Obongo also discussed the issue of capacity building, which the Board has been focusing on through major project implementation and structured training and explained that “continuous, project-based training helps equip Nigerians to handle increasingly complex industry demands.”
In his analytical discussion on the topic, the NCDMB’s Director of Finance and Personnel Management, Ifeanyi Ukoha, harped on the importance of adequate fund in local content development
According to him, the NOGICD Act mandates that 1% of upstream oil company budgets go towards local content initiatives, hence the strategy to support energy stakeholders at NCDMB by promoting collaboration.
For instance, he cited the partnership of the NCDMB with some banks, including a $50 million collaboration with the Bank of Industry to support SMEs, to demonstrate its commitment to capacity building in key sectors of the nation’s economy.
On Research and Development (R&D), the Director said that “Nigeria spends only 0.6% of GDP on R&D, compared to over 3.6% in the U.S, hinting that the NCDMB has also committed $50 million to research, aiming to commercialize innovations and foster collaboration between industry and academia to enable it to stay ahead of industry trends through continuous innovation.
Speaking on the final pillar – access to markets- that focuses on helping local companies scale commercially, Ukoha maintained that the Board had been holding market education workshops and encouraging partnerships to ensure local players can compete effectively.
He harped on the importance of aligning local market capabilities with the African Continental Free Trade Area while protecting investments and supporting regional growth, adding that local content is about domestication, not nationalization, and “a long-term business strategy, not corporate social responsibility.”
