Africa Local content fund to catalyze research
Poised to take full advantage of emerging opportunities in local content administration, key stakeholders and policy leaders in Africa’s Oil and Gas, and other related sectors, yesterday met in Yenagoa, Bayelsa State.
The participants have unanimously advocated for a new local content strategy for Africa with a focus on adequate regulatory framework, funding, human capacity development and strategic Research and Development (R&D) with effective gaps analysis to positively drive the local content narrative as an imperative for domestication and sustainable growth of Africa’s hydrocarbon resources.
The stakeholders who gathered at the maiden edition of the African Local Content Roundtable in Yenagoa, Bayelsa State on Thursday, June 3, 2021, jointly agreed that funding is critical to driving local content, especially with the negative impact of the COVID-19 pandemic which has had very negative consequences on the economy of most Africa countries.
Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB) Engr. Simbi Kesiye Wabote, FNSE, while setting the context at the Pan-African engagement, harped on the need for a strong regulatory framework as part of the efforts by the Nigerian government to make local content a core part of the national energy policy framework. He said funding and incentives are critical to implementing “local content programmes, develop infrastructure, attract new investments, and keep existing businesses afloat” adding that the Nigerian Content Development Fund (NCDF) has earmarked a $350 million intervention fund in partnership with the Bank of Industry (BOI).
The Executive Secretary also highlighted that on research and development R&D “initiatives requires dedicated source of funding” and “will provide a good platform for the academia, researchers, product developers, and inventors to showcase their break-through for development and commercialization.”
Wabote recalled that the Nigerian Oil and Gas Industry Content (NOGICD Act) 2010 as established, makes the NCDMB the sole regulator of Oil and Gas in Nigeria. He said the Board to promote local content, ensuring that the construction of its 17-story Towers in Yenagoa was done by indigenous engineers.
He said “A sustainable local content practice requires that the right regulatory framework is put in place, regular gap analysis and the setting of targets for gap closure. The right resources including funding and incentives are required to build capacities and capabilities. R&D is the key drivers to bring innovation and avoid obsolescence”
Similarly, Nigeria’s Minister of State for Petroleum Resources, Chief Timipre Sylva, opined that Africa must now come up with policies that will further deepen the conversations on local content administration, adding that the success story of the NCDMB as the champion of local content practice in Africa has led to the extension of local content services to other sectors in Nigeria and Africa at large.
The Honorable Minister, Sylva, regretted that decades of exploration of hydrocarbon in Nigeria have not translated into sustainable growth, stressing that the African Local Content Roundtable will henceforth be a “signatory event”. He said Nigeria must also look to explore its 303billion cubic feet of gas reserves.
Lending his voice to the local content narrative, Omar Farouk Ibrahim, Secretary-General of African Petroleum Producers Organization (APPO) (APPOSecretariat.org) stressed the need to put resources together before it is late to harness Africa’s oil products, adding that the time has come for countries in Africa to “close its eyes to the challenges of boundaries.”
Secretary-General Omar Farouk Ibrahim regretted that government of APPO member countries is heavily dependent on Oil and Gas revenue to meet the demands of their citizens. The implication, Omar said, is that in the next few years, the advancement of new technologies and financing would be halted as the focus will shift to renewable energy options.
He further stated that as a result of the Paris Climate Change Agreement and the COVID-19 pandemic, the organization is now committed to ensuring that hydrocarbon emissions are curtailed, as well as the continents’ over-dependence on oil, stressing that it has become paramount for every nation to have its refinery and gas plants.
Expressing his concern about the emerging realities, Omar said “We need to understand the dangers posed by the so-called energy transition. We have 600 people who do not have access to modern energy. We cannot continue to deny them this privilege. APPO is going to work with OPEC and other oil agencies between now and November,” he said.
Madam Massout Samia, APPO Executive Board Member, Algeria, posited that Africa must introduce facilitation and document activities to augment resources related to local content. She said aside from the regulation of hydrocarbon and the revenue that comes in from oil, benefits from technological advancement must also be pursued.
She said Africa must further develop the quality of its local content capacity to meet required standards, and hydrocarbon should be considered as the engine and backbone of the continent.
In the same vein, Chairman, Petroleum Technology Association of Nigeria (PETAN) Mr. Nicholas Odinuwe called on African governments to develop mechanisms for independent start-ups, as policies alone are not enough to drive local content in Africa. He said the legislation remains essential.
He highlighted that the capacity of PETAN and other stakeholders has grown since the passing of the NOGICD Act in 2010, as PETAN now has over 200 members across the sector. He acknowledged that the breakthrough is traceable to the NCDMB’s engagement with local capacity. He advised that the African Continental Free Trade Area (AfCFTA) must also create regional relationships for hydrocarbon trade with a private sector-driven initiative.
While stating that PETAN will partner with the NCDMB to expand this initiative to other stakeholders and regional markets, he lamented the situation where Africa exports its crude and imports the finished products, saying it cannot guarantee the needed progress.
Similarly, Mr. Sediko Douka Commissioner, Energy, And Mines (ECOWAS) listed some of the challenges impeding the local content initiative as the absence of well-established institutions, lowly motivated staff, lack of private sector participation, low level of value addition, licensing, and climate change.
The ECOWAS rep emphasized the need to improve on regional cooperation and development of the extractive industry with a call for improved infrastructure to promote an investment-friendly climate and the establishment of institutions to drive the local content narrative in Africa.
He also prescribed the promotion of the advancement of human capabilities through training and enhancement as a panacea for integrated guidelines for social corporate responsibility. He further stressed the need to have local content as the backbone for development in Africa and urged member countries to ensure that its oil facilities are open to member countries.
Mr. Francis Anatogu, Executive Secretary, National Action Committee on AfCFTA, observed that for any product to be considered as local content, it must meet a minimum local content standard. He said “We must do local content to protect our currency and grow it. Africa records over $500billion of products per annum,” he noted.
According to the AfCFTA Exec Secretary, the local content initiative is capable of lifting 30 million Africans out of extreme poverty, boost the incomes of nearly 68 million others who live on less than $5.50 a day, increase Africa’s exports by $560 billion, mostly in manufacturing, and boost Africa’s income by $450 billion by 2035 (a gain of 7%).