Ulari recently represented the community at the following event and gives a summary on the key issues and remarks.
Nigerian Content Development Stakeholders Conference
Theme: Stimulating Local Capacity
Date: December 3rd, 2012
Venue: Sheraton Hotel, Abuja.
Organisers: House of Representative, Committee on Local Content
Facilitators: Tandice- B Solutions Limited
- Waiver grants set to last for three years. This will expire in March 2013.
- Funding- Banks are not amenable to local companies. Interest on Bank facilities starts from 25%, while international operating companies can source facilities on interest rates starting from 3%.
AIMS
To understand Local Content and how to do more about achieving it. The meeting was a follow up to the meeting held in June at Port- Harcourt, Nigeria where a few issues where highlighted.
KEY REMARKS
- It is important to strike a balance between revenue versus value, petroleum economics Û National Development Economics.
- Key questions that need answers, why are we not shipping our crude oil? Why are we not putting percentage on crude oil tankers than we’re putting on tank barges? NLNG has delivered some results, however more needs to done.
- In terms of creating Gas awareness, Government needs to provide the back-up. In addition, private sector needs to prompt the government in this regard, because government will not do the business.
- In relation to the Local Content Act, it is pertinent that people understand the principles, not necessarily knowing 100%, or word- for – word the clauses or content.
- Two strategic areas of focus should be Revenue and In- Country value.
- We should not just concentrate on buying from abroad, but focus on building/ manufacturing within the country. Every time we decide to manufacture abroad, we have taken at least 500 jobs out of the country. Knowledge is not growing or developing.
- The Nigerian content issues are far deeper than measurement, because when we focus on measurement, we stress on achieving set figures.
- What makes a great oil producing Nation – A Robust supply chain, Facilities, Asset ownership, Manufacturing, Human Capital, a skilled work force and Research &Development
- We should focus on community participation in the supply chain.
- Operators need to bring communities in, such as community contractors.
- Monies spent in foreign economies need to be spent in Nigeria.
- Capacity development initiatives – companies need to do more to support the effective development of local content.
- IOCs must learn to invest in communities. This helps to curb security challenges e.g. unrest from local youths.
- Considering that the local content funds are guaranteed by the government, the interest rates should be reduced.
- Local content is currently not global on all industries (e.g Construction and Manufacturing), Other industries have no penalty for not following local content. The IOCs are asking that the scope of the Act be broadened.
- House of Assembly is willing to work on local content and its prevailing issues but will largely depend on the technical recommendations of key industry players.
- There should be a balance in the utilization of waivers. A balance between Foreign Direct Investment and Local production of goods and services.
- Waivers should drive increased local manufacturing through determined time.
- Local financing should go beyond contract servicing and focus on local manufacturing.
- Waiver process should first include identification of existing capacity, in – country to meet required demands.
- Waivers should be used to pull in Foreign Direct Investment not pull out.
- In FPSO integrations, employee generation of over 400 people can be achieved.
- Not having a waiver can lead to loss of employment opportunities, low GDP among others.
- Waiver discussions should be open for debates and any waiver granted should be publicised.
- There is the need to look into how waivers are administered as we still require some external assistance in key projects, this is because the capacity is still lacking in many areas/ factors.
- Delegating the power of approving waivers to the NCDMB is crucial, as they are more in tune with the realities, and conversant with the re-occurring issues.
- Achieving the waivers are not usual, as other developed countries even countries of the MNCs and IOCs have achieved this.
- An effective administration of waivers will achieve transparency, Publication of waivers, Consequence management (for waivers received under false documentations or reasons).
- Waivers should be tied to sweeteners or incentives.
- Incentives should be given to those companies that help to achieve and develop local content initiatives.
- Waiver administration should be done in steps, ending the waivers by March next year is not feasible.
- There is the need to work local companies to develop businesses that will improve capacity.
- Long term in –country capacity development, oil and gas production growth and major project delivery is key.
- Currently, there is no clear definition of “indigenous company” in the Act.
- Contributions and write ups to amend the Acts are welcomed.
Ulari is a result driven professional with a diverse
experience in the UK and Nigerian financial services industry. With a global
outlook to organisational behaviour, human capacity development, improved
business efficiency and a strategic approach to decision making, she has led
several teams and supported management across a spectrum of organizations and
industry. A graduate of Sociology(BSc),
International Relations - International Politics (MA), she is passionate about
supporting organisations to achieve their maximum performance, having quality
employees that are fully engaged by their organisations, supported by efficient
systems and processes. She is a firm believer that a synergy between people,
system and processes, is a key driver for any organisation to succeed.
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