While there may have been substantial progress in local participation in the Nigerian oil industry, there is need for caution in celebrating this “feat.” At the Nigerian Content forum held in Yenegoa, Bayelsa State, late last November, the Minister of Petroleum Resources was full of praise for the Federal Government over what she termed massive improvement in the level of Nigerian content recorded in the oil and gas industry. From what she described as an abysmal 3-5 per cent level at the inception in 2010 of the Nigeria Oil and Gas Industry Content Development (NOGICD) Act concerning “all matter pertaining to Nigerian content in respect of all operations or transactions carried out in or connected with the Nigerian oil and gas industry,” the position moved to 12-18 per cent by the third quarter of 2014. The minister was upbeat that in that quarter, the Nigerian Content Development and Monitoring Board (NCDMB) categorized 1,232 marine vessels out of which those found to be Nigerian Content Act-compliant and qualified to be given first consideration in award of maritime vessel contracts represented 89.2 per cent. Caution! Although the NOGICD Act stipulates that proven local capacity in any specific operational/transactional area be fully exhausted before any vying foreign entities may be accorded attention, what remained unclear in the preceding statistics was the proportion of overall marine contracts in the industry that the compliant vessels were capable of handling.
Nonetheless, by shedding light on an aspect of its activities, the Ministry of Petroleum Resources deserves some praise for its achievements. In that regard, however, despite the great variety of operations and transactions in the oil and gas industry, after more than five decades of commercial oil production, the Petroleum Ministry and/or NCDMB should come up with a single weighted oil and gas industry achievement indicator or specific operation/transaction achievement scores. The minister’s wide percentage achievement bands noted earlier are unhelpful.
Elsewhere on Snake Island, Lagos State, the NCDMB late last November celebrated the load-out of locally fabricated parts for gas gathering and well-head platform projects. Buoyed by the milestone of demonstrable capacity of several local companies to manufacture platforms and marine vessels that meet international standards, the Board has directed that from January 2015, prospective importers of marine vessels should submit in advance the Nigerian content plan of the proposed purchase and obtain from the Board which sections of the vessels should be manufactured in the country in accordance with the NCDMB marine vessel utilization scheme. Any defaulting vessels will not be allowed to work in Nigeria. The scheme bolsters Nigerian content by “seek(ing) to encourage construction of vessels in Nigerian yards, promote ownership of marine vessels by Nigerian entities, stimulate flagging and registration of vessels in Nigeria and deepen Nigerian manning of marine vessels”. The NCDMB should implement its bold directive to the letter.
And apart from giving progress report on the new rule, the Board, come end-December 2015, should make public its achievements regarding other short-term targets issued to the industry, including the amount of locally retained expenditure out of the $20 billion average annual expenditure on the industry, the volume of direct employment and training opportunities recorded, the new pipe mills built and additional dockyards constructed. It is also pertinent to remind the Board that several entities that do not satisfy the definition of a Nigerian company under Section 106 of the NOGICD Act purchased oil blocks that were force-relinquished by international oil companies. This breach should be rectified.
Coincidentally, as the four-year-old NCDMB was celebrating tangible success in promoting and protecting Nigerian industry and jobs, the far much older Standards Organisation of Nigeria (SON) held a stakeholders’ forum to rehash why Nigerian manufacturers are unable to compete in the face of fake and substandard imported products. The SON let it be known not long ago that 80 per cent of manufactured products in the Nigerian market are imported. At its November forum, the SON sang the usual dirge, namely, “Today nobody is making tyre; nobody is doing that”. Yet, the SON is the willful accomplice in Nigeria’s national de-industrialization because together with NAFDAC, it (SON) specialises in licensing manufacturers based abroad to produce goods that conform to its set product standards for Nigerians to import. Not unexpectedly, unscrupulous importers exploit that situation, no thanks to the all-comers’ access to forex, to flood the country with fake and substandard foreign products.
That unacceptable state of affairs has prevailed for too long. It is therefore imperative for the SON to repair double-quick to the NCDMB for tutorial on how to get foreign manufacturers to relocate here in Nigeria, resurrect the numerous dead factories and produce the final products being imported to satisfy domestic demand. That way, jobs will be created while the economy will become increasingly diversified. Although the aforesaid SON forum outwardly aims at mobilizing concerted action to better control the entry of unwanted goods to enable domestic manufactures to compete with quality imports, the vision and approach are self-defeating. Local production conditions in the foreseeable future will not be internationally competitive. So the eventual outcome of the SON approach would be to strengthen the stranglehold of SON-designated foreign manufacturers in the Nigerian market place.
Fortunately, the SON’s designs to promote the interests of foreign economies can be easily turned around to further first and foremost the national interest. Thus the presidential directive to the SON forum calling on some 47 maritime and related agencies to automate their processes within three months in order to link them together should be carried out as scheduled. But rather than make Nigeria a captive market for foreign based manufacturers as initially intended, the efficient and transparent port services expected to result from the automation linkage will form instead the basis of placing a watertight protective shield over Nigeria-based manufacturing entities irrespective of their ownership hue. That is the historically attested way to successfully industrialise and emancipate any economy.
