‘Nigeria’s oil sector lost $380b, two million jobs in 50 yrs’

Ernest-NwakpaA GLOOMY picture of Nigeria’s oil and gas sector was on Monday painted as it was revealed that the sector exported two million jobs and suffered an estimated capital flight of about $380 billion in 50 years, with over 95 per cent of industry yearly budget expended abroad.

However, if the successes being recorded are consolidated by 2020, the country will become the hub for oil and gas services and an estimated $191 billion could be retained while 300,000 new jobs created in engineering, sciences and technical services and over 65 per cent of industry spend domiciled.

This was disclosed at a Capacity Building workshop organised on Monday in Abuja by the Nigerian Content Development and Monitoring Board (NCDMB) for members of the Local Content Committee of the House of Representatives.

Disclosing this, the NCDMB’s Executive Secretary, Ernest Nwapa, explained that the Board was implementing the Nigerian Content Act to reverse a situation whereby the Nigerian oil and gas industry merely exported jobs and aided capital flight from the economy between 1956 when oil was discovered and 2006 when the Nigerian Content Policy was introduced.

Nwapa further drew the attention of the committee members to some policies and practices, which impair local content development in Nigeria like the Temporary Import Permit (TIP) for marine vessels.

He explained that the TIP not only discouraged the ownership and registration of marine vessels in Nigeria, but also gave advantages to foreign vessel owners, who are allowed to pay a token to the government for bringing in their vessels.

“Furthermore, it promotes the practice whereby vessels that work in Nigeria sail to neighbouring countries to meet their TIP conditions and undergo repairs concurrently whereas such maintenance can be done at ship yards in Nigeria.”

Speaking further on the Board’s implementation strategies, Nwapa said emphasis was being placed on areas with high impact on employment, retention of industry spend, technology transfer and value added services.

He identified the marine sector as one of such areas, noting that it used to be dominated by foreign owned and crew vessels and rig operators, resulting in $3 billion capital flight.

However, the Board has now come up with marine vessel and rigs ownership strategy, which has begun to ensure a change in the status quo.

He added that indigenous players are currently participating fully in the smaller vessel category, thereby retaining about $1 billion yearly spend in Nigeria while a structured intervention for more Nigerian ownership of the larger offshore vessels had been put in place, with a potential for retaining a further $1.5 billion in the next two years.

Nwapa further noted that a number of indigenous players are making efforts to build and acquire vessels but needed funding support and long tenure contracts to protect their investments.

There is optimism, however, that the current drive by the Board will ensure that by 2020, the ownership profile in the marine sector would be more indigene-driven with a retention in excess of $4 billon a year, 250,000 employment and training opportunities.


Please enter your comment!
Please enter your name here