The indigenous oil firms have accessed 90% of the $200 million Nigerian Content Intervention Fund set aside by the Nigerian Content Development and Monitoring Board (NCDMB), the Executive Secretary of NCDMB, Simbi Wabote revealed despite tight conditions.
However, despite the amount already obtained, the level of accessibility of the NCI Fund is quite difficult for some industry players in Nigeria. The NCI Fund is a credit facility for indigenous manufacturers, service providers and other key players in the oil and gas industry in need of fund.
About the Fund: The NCI Fund which is being managed by the Bank of Industry (BOI) is a portion of the Nigerian Content Development Fund (NCDF). The available types of funding under the NCI Fund include loans for manufacturing, asset acquisition, contract finance, community contractor finance and loan refinancing.
One per cent of all contracts, subcontracts, projects and activities in the upstream sector of the Nigerian oil and gas industry is statutorily to be deducted and remitted to the NCDF, as stipulated by Section 104 of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010.
Difficulty of accessing fund: But accessing the fund has been difficult for some due to the conditions such as bank guarantee from the applicant’s commercial bank. According to a report, shipowners are complaining about the conditions tied to getting the fund. This wouldn’t be the first time the NCDMB will be requested to relax its conditions.
Nairametrics had reported September 2018, that the NCDMB and BOI had agreed to relax its conditions around the fund that year. They both unanimously agreed that the BOI may consider the inclusion of insurance bonds as collateral for accessing the fund, provided the bonds are issued by competent and major insurance companies qualified by the Bank.
More so, there was a consensus that BoI should accept other forms of collateral outside of bank guarantees, which are listed against each loan type and applicants that have unencumbered collateral acceptable to the BoI can access the NCI Fund loan without recourse to bank guarantee. But Wabote said access to the fund will not be eased this time.
No going back on condition: But Wabote said the condition will remain regardless. According to him, the conditions were put in place to ensure the purpose of the fund is met by the applicants. This, Wabote said, will allow the success of the credit scheme, “We set tight conditions because we do not want the fund to fail”.