Local Content: Nigeria loses $8b to capital flight in oil industry

Posted by News Express | 3 August 2016 | 2,127 times

Gmail icon


Indications have emerged that Nigeria has lost over $8 billion due to capital flight in the nation’s oil and gas industry, as the International Oil Companies (IOCs) have continued to award of contracts to foreign firm, contrary to the provision of the Nigerian Oil and Gas Industry Content and Development Act (NOGICD) Act 2010.

The Chairman, House of Representatives Committee on Local Content, Honourable Emmanuel Okon, who disclosed this during an inspection of shipyard and fabrication complex operated by West African Ventures at Onne in Rivers State, said that poor patronage of local firms had resulted in huge capital flight in the industry.

While calling on the IOCs to patronise West African Ventures (WAV) and other indigenous companies, which would help reduce capital flight and further promote local content, Okon informed that the Federal Government would cancel oil and gas contracts awarded by IOCs to foreign companies where there was in-country capacity to execute such contracts by indigenous companies.

According to him, the committee decided to have a physical examination and assessment of facilities put in place by WAV and other indigenous companies so as to avoid supporting  indigenous contractors, otherwise known as flight by night contractors acting as commission agent for foreign companies in Nigeria.

He said: “We believed that companies such as WAV with huge investment within the country as employer of over 5,000 Nigerians should be encouraged so that the investors   can do more. That way, we will reduce capital flight, which is money going out of this country, significantly.”

Okon stated that the patronage of indigenous companies with capacity would boost revenue earnings of the economy, save more money and create more employment opportunities by encouraging investors that have shown credibility and super quality in its business.

He said: “What we have seen here is 100 per cent Nigerian company and by that law, this company (WAV) is supposed to be patronised first by the IOCs, where they need marine services. That’s what the law says and the law is not ambiguous but explicit.

“It says wherever there is a Nigerian competence, there is an in-country capacity and there’s a job, within the oil and gas industry. The law states that the IOCs or whoever is giving out that contract, should first of all give a Nigerian company the right of refusal.

“Today, IOCs will say they are doing local content but I think the best they can do for Nigeria is to patronise indigenous companies  like WAV so that they can in turn engage Nigerians teeming unemployed youths.” (independentnig.com)

•Photo shows Dr Kachikwu.


Source: News Express

Readers Comments

0 comment(s)

No comments yet. Be the first to post comment.


You may also like...