The Governing Council of the Nigerian Content Development and Monitoring Board (NCDMB) has announced that the federal government has approved the expansion of the Nigerian Content Intervention Fund (NCIF) from its current $200 million to $350 million.
The fund was which was instituted in 2017 is managed by the Bank of Industry (BOI).The fund would facilitate on-lending to qualified stakeholders in the Nigerian oil and gas industry on five loan product types.
The Intervention fund which is aggregated from the one per cent deduction from the value of contracts executed in the upstream sector of the oil and gas industry, is a portion of the Nigerian Content Development Fund (NCDF).
As at May 2020, about 94 per cent of the NCIF has been disbursed to 27 beneficiaries, while the board has received new applications from 100 firms for nearly triple the size of the original fund.
Guidelines for the NCI fund provide that beneficiaries of the manufacturing loan and asset acquisition loan can access a maximum of $10 million respectively.
Also, beneficiaries of contract finance loan can access $5 million, while those interested in the loan re-financing package can access $10 million, with beneficiaries of the community contractor finance scheme limited to N20 million.
As result of the coronavirus pandemic, in April 2020, the governing council approved the reduction of the interest rate from eight to six per cent per annum for all four of the loan products and extended the moratorium for all loan products.
Chief Timipre Sylva, the Minister of State for Petroleum Resources, disclosed that the enlargement of the fund by $150 million was part of the decisions taken at the NCDMB Governing Council meeting which he chairs.
“During the meeting, the council approved that $100 million from the additional funds would be deployed to boost the five existing loan products of the NCI Fund, which include manufacturing, asset acquisition, contract financing, loan refinancing and community contractor financing.
“Similarly, the council approved that $20 million and $30 million respectively should be deployed to two newly developed loan product types — the Intervention Fund for Women in Oil and Gas and PETAN Products — which include working capital loans and capacity building loans for PETAN member companies,” Sylva said.
NCDMB has also given its assent for the establishment of a $50 million Nigerian Content Research and Development Fund (NCRDF) for sustainable funding of the board’s mandate on research and development.
According to the organisation, the move will help institutionalise a robust R&D ecosystem that will lead to continuous development of technology, materials and process for industry application from indigenous research efforts.
“Nigeria spends about 0.2 per cent of its Gross Domestic Product (GDP) on R and D and this indicates a poor commitment, resulting in over-dependence on foreign technology for critical economic development activities, including oil and gas operations,” it said.
The fund is expected to close the gap and will be applied in four broad intervention areas, namely: research, establishment of centres of excellence in academic and research institutes, sponsorship of commercialisation of research and sponsorship of endowment of professorial chair.
“The NCDMB will put in place an outcome focused performance metrics that will measure success in the application of the fund and form part of the reporting template to the governing council on an ongoing basis,” it noted.