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NCDMB wants more oil firms to access $200m fund

The Nigerian Content Development and Monitoring Board and the Bank of Industry are set to meet with oil and gas service companies, community contractors and commercial banks in a bid to address the factors responsible for the slow disbursement of the $200m Nigerian Content Intervention Fund.

The NCI Fund is a portion of the Nigerian Content Development Fund set aside by the NCDMB for the BoI to manage and lend directly to indigenous manufacturers, service providers and other key players in the oil and gas industry to meet their funding needs.

One per cent of all contracts awarded in the upstream sector of the country’s oil and gas industry is deducted and remitted to the NCDF as stipulated by Section 104 of the Nigerian Oil and Gas Industry Content Development Act.

The Director, Finance and Personnel Management, NCDMB, Mr Isaac Yalah, was quoted as saying at a workshop in Lagos that the consultations would hold in August and September.

According to him, the engagement with oil firms is specifically for applicants to the NCI Fund whose submissions have been incomplete for a while, to discuss the challenges they have with completing their applications.

He said the NCDMB and BoI would also meet community contractors to foster wider participation from them in the NCI Fund.

“There is a need for town hall meetings with community contractors to know why they are not applying for the loans as expected,” Yalah added.

According to him, the session with managing directors of commercial and microfinance banks is also intended to find ways to understand their requirements for quicker issuance of bank guarantees needed for processing applications for the NCI Fund.

He said the board was dissatisfied with the low number of companies and community contractors that had accessed the $200m NCI Fund since it was launched in August 2017 and released to the BoI.

Yalah stated that only about $10.55m, less than 10 per cent of the fund, had been disbursed.

“We are concerned about the poor accessibility of the NCI Fund. We will engage the companies that have tried and others seeking to apply to discuss the way around the challenges,” he added.

According to the statement, the NCI Fund covers manufacturing loan, asset acquisition, contract finance, community contractor finance scheme and loan re-financing, and the loans have a maximum tenor of five years.

It said, “Applicants seeking loans for manufacturing and asset acquisition can access $10m at eight per cent interest rate, while applicants for contract finance loan can access $5m also at eight per cent interest rate.

“Loan re-financing applicants can access $2m at eight per cent interest rate; whereas community contractors can get N20m, repayable at five per cent interest rate.”

In his presentation, the General Manager, NCDMB, Mr Obinna Ofili, explained that about $45m was remitted by operating and service companies to the NCDF Account between January and April 2018.

He stated that remittances to the fund increased because of the planned third-party forensic audit that would reveal companies in default of NCDF payments.

According to Ofili, the NCDF Account has a current balance of $450m and is domiciled in the Central Bank of Nigeria’s Treasury Single Account aside from the $200m NCI Fund with the BoI.

“We are using portions of the NCDF to support the development of modular refineries, NOGAPs, pipe mills and training programmes that the board sponsors,” he added.