Nigerian government through Nigerian Content Development and Monitoring Board (NCDMB) announced Nigerian Oil and Gas Park Scheme after many decades of oil exploration in Nigeria. Nigeria is an oil producing country in the world that spends about $3.6 billion in a year to subsidized the price of Petrol. The new dream was a plan called “Nigerian Oil and Gas Park Scheme (NOGaPS)”.
What is Nigerian Oil and Gas Park Scheme?
The Nigerian Oil and Gas Park Scheme is a scheme rolled out by Nigerian federal government through Nigerian Content Development and Monitoring Board (NCDMB) to support in-country Oil & Gas industry and linkage sectors manufacturing. A system to encourage business men and women doing business in the industry to manufacture what they need here in Nigeria instead of importation.
NCDMB said Nigerian Oil and Gas Park Scheme (NOGaPS) is a scheme to financially support local manufacturing of Equipment in Oil & Gas industry and linkage sectors in Nigeria.
Read: NCDMB Registration Requirements (Local Content)
The Nigerian Oil and Gas Park Scheme (NOGaPS) dream implementation started with plan to build two offices across Nigeria. Nigerian Oil and Gas Parks Scheme (NOGaPS) at Odukpani, Cross River State and Nigerian Oil and Gas Parks Scheme (NOGAPS) at Emeyal-1, Ogbialand, Bayelsa State.
The Nigerian Content Development and Monitoring Board (NCDMB) has move further on this dream by securing approval to launch a $50 million fund for Nigerian Oil and Gas Park Scheme meant for Manufacturing Product Line only.
The fund would be dedicated to companies that would operate in Nigeria’s Oil and Gas Parks and engage in the manufacturing of equipment components used in oil and gas industry and linkage sectors.
NCDMB revealed this at the commissioning of the ultra-modern valves assembling facility established by Catobi Nigeria Enterprises Limited in Port Harcourt, Rivers State.
The fund would support oil and gas companies that operate in the oil and gas parks developed by the board in Bayelsa and Cross River State. The parks are expected to be commissioned and operational in the fourth quarter of 2022 and would incubate the manufacturing of equipment components utilised in the oil and gas industry and create an estimated 2000 jobs in each park.
Read: Your Business & Nigerian Local Content Requirement
The board approved the $50 million for product plan like the Nigerian Content Intervention (NCI) Fund to support in-country manufacturing of components within the industrial parks.
The NOGAPS Manufacturing fund will soon be launched and will be managed by the Bank of Industry (BoI) to address identified challenges.
The new fund would be a stand-alone product line with distinct fund allocation and special eligibility criteria and collateral structure.
The decision of the board to establish the product was informed by the peculiarities of the manufacturing sector, which include infrastructure challenges, long gestation, long lead time before returns, low margins on products, and high risk attached to the endeavour, in addition to the reluctance of commercial banks to lend to the sector and application of stiff collateral and eligibility criteria where loans are extended.
The board established the Nigerian Content Intervention (NCI) Fund in 2018 with the purpose of financing oil and gas companies to increase capacity and grow Nigerian content in the industry. Presently, the NCI Fund has five product lines that are being managed by the Bank of Industry.
They include:
Manufacturing Finance -$10 million
Asset Acquisition Finance -$10 million
Contract Finance -$5 million
Loan Refinance -$10 million and
Community Contractor Finance – N20 million.
Read: Meeting Nigerian Local Content Act
The Board also has a US$30 million Working Capital Fund for oil and gas service companies and US$20m Fund for Women in Oil and Gas Intervention Fund. Both facilities are administered by the Nexim Nigerian Export-Import Bank and the agreements were signed in mid-2021.
The Executive Secretary stressed that the manufacturing sector is central to the overall initiative of the Federal Government and NCDMB to develop the economy and create indigenous capacity in the supply chain.
Nigeria local consumption of fuel or petrol is almost 100% imported. Almost every pin as tool or equipment are in the industry are imported. Nigeria also issues petrol export license to people to export her imported fuel to laboring countries.
In conclusion, we want to appreciate the team that brought this beautiful dream or idea while we look forward for the implementation.
that it will not end in Pipe-line as popularly said in Nigeria when government comes up with wonderful promises that will not be fulfil.