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Nigeria experiences $380billion capital flight

By on April 23, 2013

The implementation of the Nigerian Content Act, by the Nigerian Content Development and Monitoring Board, NCDMB, has saved Nigeria a capital flight of about $380 billion and a job loss of two million in the oil and gas sector.

The Executive Secretary of NCDMB, Mr. Ernest Nwapa, who was represented by General Counsel of the board, Mr. Umar Babangida, stated this at the just ended Esq Energy/ Oil and Gas Summit, held in Lagos.

According to him, more than 95 percent of the jobs in the industry were done abroad, as indicated below:

·Procurement of $214 billion; and research and development of $9 billion were done in North America

·Technical services – $78 billion and engineering work $39 billion done in Europe.

·Fabrication of $39 billion dominated by Asia.

However, the NCDMB boss said that with the coming of the Content Act 2010, the quantum of capital flight had been reduced significantly by about $168billion.

Accordingly, procurement of $107 billion; fabrication $20 billion; technical services $14 billion; engineering $20 billion; and research and development $7 billion have been domiciled in country on account of the Content Act.

Nwapa also added that about $191 billion more could still be retained, while 300,000 new direct job opportunities are expected in such areas as engineering, sciences, technical services and manufacturing.

Although the NCDMB scribe could not give details, but he pointed out that there has been a marked increase in contract awards to Nigerian companies, as the proportion of work done in country had peaked.

He concluded that about 90 percent local content had been achieved in the area of engineering, and 50 percent in fabrication.

On the one percent of the contract sum for any project, which must be deducted at source and paid into the NCD Fund, Nwapa said that about $150 million had accrued to the Fund as at January 2013.

He maintained that strong stakeholder collaboration and local value addition framework would be required to achieve real Nigerian content.

In its determination to stimulate in-country capacity, he said the NCDMB had acquired 10.2 hectares of land in Polaku community, in Yenagoa, Bayelsa State, for the construction of a pipe mill.

 

 

[Vanguard]