Minister of State for Petroleum Resources, Chief Timipre Sylva, has said that Nigeria has achieved a significant 35% local content compliance in 2021 from a dismal 5% in 2010.
Speaking at the maiden edition of the African Local Content Roundtable(ALCR), at the Nigerian Content Tower, Yenagoa, Bayelsa State, on Thursday, Sylva said through the implementation of local content Nigeria has been able to achieve significant progress in value addition adding that Nigeria plans to achieve 70% local content compliance in the next six years.
He said “we have achieved significant growth in-country value addition from less than 5% in 2010 to 35% in 2021 and we have set an ambitious target to achieve 70% local content in the oil and gas sector by 2027”.
Sylvia stated that the nation’s “success story in the oil and gas industry has led to bold step to extend local content to other sectors of the Nigerian economy,” stressing that “as a caring African country, we have also considered it necessary to amplify the benefits of local content to our fellow African countries and that is the essence of the African Local Content Roundtable”.
Speaking further, the minister said, “any country that aspires to achieve rapid and sustainable economic growth must put in place an economic model that enables its human capital to harness its natural resources to create wealth and economic prosperity”.
He noted that Nigeria embraced “local content as an economic development model for the oil and gas sector” adding that the move helped to effectively develop the nation’s abundant hydrocarbon despots in Nigeria.
While lamenting the lack of benefits from hydrocarbon production in Africa to the desired economic growth in our Continent the minister said “while over 15 African nations are producing and exporting crude oil, the sad reality is that our people have not benefitted maximally from this natural resource, either because we have not managed the proceeds optimally or we failed to domesticate the core operations of the industry”.
Sylva said as a continent “we must therefore use the opportunity of this round table to initiate conversations around local content, share success stories, challenges and come up with policies that would deepen local participation and domiciliation in our respective countries”.
He said one of the pathways for this desired collaboration and cross-country development is the African Continental Free Trade Area (AfCFTA) adding that he was “pleased that we have a representative of AfCFTA in this forum”.
He continued “Indeed, AfCFTA provides an opportunity to create a single market through the facilitation of free movement of goods, services and investment within the 54 member states of the Continent, creating access to 1.2 billion customers, with a cumulative Gross Domestic Product (GDP) of over US$3.4 trillion”.
“It is imperative that African oil-producing countries and their companies cooperate closely in developing and sharing capacities and capabilities to optimize the hydrocarbon deposits and achieve economic growth and development” the minister further stated.
He added that “It makes better business sense to partner with an Umbilicals producing plant in Angola, or a bolt manufacturing company in Niger Republic instead of going all the way to United States and Norway for the same products”.
“We must take firm decisions and develop policies and projects that would position our industry competitively and sustain our economy under the emerging energy transition.
He disclosed that the Federal Government of Nigeria “took firm steps in this regard very recently, funding two strategic energy projects in Nigeria. A 10,000 tons per day methanol plant and 500 million standard cubic feet per day gas processing plant in Brass, Bayelsa State and the Ammonia and Fertilizer plant in Akwa Ibom State”.
The expectations of the Federal Government he said Is that “the ALCR will become a signature event, leveraging on the wonderful foundations already built by APO and rotating among all the African oil-producing countries”.
The programme was organized by the Nigeria Content Development and Management Board, (NCDMB), to institutionalize Local Content practices in the African continent.
The objective of the pan-African Roundtable is, in addition, to help institutionalize peer review mechanism among Oil-producing countries on local content as a key development imperative for domestication and sustainable growth of Africa’s hydrocarbon resources.