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No non-performing loans on NCIF, says NCDMB

. Disburses over $293.3m to 61 firms

. Supports gas as transition fuel

By Clara Nwachukwu

The Nigerian Content Development and Monitoring Board (NCDMB), yesterday affirmed that none of its interventions under the Nigerian Content Intervention Fund (NCIF), has recorded non-performing loans (NPLs).

This is even as the Board said it has already disbursed $293.3 million and N32.8 billion to 61 firms under various interventions by the NCIF, describing the Fund as the best performing in the country.

The General Manager, NCIF and Treasury, Dr Obinna Ofili, disclosed this at the Nigerian Content Capacity Building Workshop for Media Stakeholders, in Lagos.

Ofili said the success of the Fund is attested by the “very good credit appraisal and loans management,” by the development finance institutions (DFIs), including the Bank of Industry Limited (BoI), and the Nigerian Export-Import (NEXIM) Bank.

Specifically, NCDMB is particularly happy with the performance of the $300 million being managed by BoI, which disbursed the $293.3 million and N32.8 billion to 61 indigenous firms.

He said the total balance with BoI was about $31.5 million and N3.11 billion as at November, while total money creation through the loan disbursements amounted to about $25 million and N34 billion, respectively.

He noted that prior to NCDMB’s partnership with BoI, the leading DFIs in Nigeria with NPLs below five per cent; the NCIF was unutilised for years – 2010 to 2013, despite a 50% interest rebate and single-digit interest rate.

Consequently, he said the NCDMB decided to tweak the operationalization of the intervention funds by partnering with DFIs, with strict guidelines on the mode of disbursements.

For instance, on the $300 million domiciled with the BoI, he said the maximum interest on the cost of capital is 8% per annum, compared with 25%+ from commercial banks. The rate was further reduced to 6%, which will elapse this December end.     

He said: “NCDMB collaborated with development banks with focus on development and not just profit. NEXIM Bank is focused on financing companies to break into the service sector in Africa and become big corporates,” he said.

The total balance with BoI was about $31.5 million and N3.11 billion as at November, while total money creation through the loan disbursements amounted to about $25 million and N34 billion, respectively.

NCIF variants

Aside the $300m managed by the BoI, Ofili listed other variants of the NCIF to include the:

  • NCDMB Research & Development Fund with Central Bank of Nigeria $50 million
  • Working Capital & Capacity Building Fund with NEXIM Bank $30 million
  • Women in Oil & Gas Fund with NEXIM Bank $20 million
  • NOGAPS Manufacturing Fund with Bank of Industry $50 million
  • NCDMB Direct Interventions through Equity Investments $181 million, and N3 billion

He explained that the Nigerian Content Development Fund (NCDF) was a special fund created to finance local content development in the oil and gas industry.

“Covered entities are required to deduct and remit obligations accruing there into the Nigeria Content Development Fund, while covered entities have the responsibility to ensure their affiliates and contractors comply with the provisions of the Act,” he said.

He maintained that NCDMB is empowered to manage and administer the Fund, created to increase capacity and capability of Nigerians and indigenous companies operating in the oil and gas industry.

He said the success of the Fund has made the NCDMB self-sustaining and the Board no longer receives intervention from the Federal Government.

He said the larger chunk of 70% of the Fund is used for commercial interventions under the NCIF, and 30% for capacity building, thereby strengthening the Board’s independence.

He added that the success is also reinforced by Partnership amongst Government-owned institutions – NCDMB/BoI; NCDMB/NEXIM Bank; and NCDMB/Central Bank of Nigeria (TSA); and service level agreements (SLAs) with other agencies of the government.

He urged Nigerian firms to take advantage of the fund, which he said can be accessed and processed online from application to disbursement.

Covered entities are required to deduct and remit obligations accruing there into the Nigeria Content Development Fund, while covered entities have the responsibility to ensure their affiliates and contractors comply with the provisions of the Act.

Gas development

Meanwhile, the NCDMB has thrown its full weight behind the Federal Government’s strategy to use gas as transition fuel for Nigeria’s rapid economic development.

The General Manager for Corporate Communications and Zonal Coordinations, NCDMB, Dr Ginah O. Ginah, reiterated this during the workshop, themed: Enhancing Media Competences to Support Nigerian Content in a Gas Economy.”

He said the workshop was deliberately selected to encourage the media to give adequate attention to the Government’s aspirations in the gas sector and the NCDMB’s efforts to support such objectives through its various programmes.

Ginah said: “As you are aware, President Muhammadu Buhari declared 2021 – 2030 as Nigeria’s Decade of Gas and announced the Federal Government’s determination to fully exploit the nation’s abundant gas resources to accelerate the development of the economy.

“The Federal Government’s strategy is to use gas as Nigeria’s transition fuel. The Ministry of Petroleum Resources has backed this position with bold policies such as the National Gas Expansion Program, Gas Network Code and Flares Commercialisation programme.”

He decried the opportunities missed in the refusal by previous administrations to take final investment decisions (FIDs) on the Brass and Olokola liquefied natural gas (LNG) projects, saying that Nigeria would have reaped bountifully from these investments given the current Russia Ukraine war.

Ginah recalled that the international oil companies (IOCs), interested in the Brass LNG for instance, had spent over $1billion before the FID on the project was suspended.

This, he said, has ignited the interest to use gas as a transition fuel, adding that “the NCDMB has also taken deliberate steps to actualize the Federal Government’s declarations in gas and other aspects of the oil and gas value chain.

“We have partnered with credible investors to develop critical projects in the sector to take Nigeria towards the goal.

“In total, we have partnered with 15 firms to set up projects covering modular refining, gas processing, gas distribution, power generation, manufacturing and others.”

Ginah defended that such partnerships are in line with the Section 70 (h) of the Nigeria Oil and Gas Industry Content Development (NOGICD) Act, which empowers the NCDMB to “assist local contractors and Nigerian companies to develop their capabilities and capacities to further the attainment of the goal of developing Nigerian content in the Nigerian oil and gas industry.”

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