NEXIM Partners With NCDMB To Build Capacity For Oil And Gas Services
The Nigerian Export-Import Bank (NEXIM) and the Nigerian Content Development and Monitoring Board (NCDMB) have agreed to collaborate towards building capacity for Nigerian Entrepreneurs to provide services to the Oil and Gas Sector. The pact was activated via two separate Funds Management Agreements signed by the two organizations in June 2021.
The first was the Working Capital and Capacity Building Fund Agreement, which was signed on Wednesday, 23rd June 2021 at the Abuja Office of NCDMB, under which $30million has been provided by NCDMB. The Fund is to be used to provide soft loans to Nigerian oil service providers for the purpose of asset acquisition and working capital support towards executing services contract in the Oil and Gas Industry as part of local content development initiatives.
A separate $20million Managed Fund Agreement was also signed on 29th June 2021 at the Head Office of NCDMB in Yenagoa, Bayelsa State to operationalise the Women in Oil & Gas Intervention Fund, created for the purpose of financial inclusion of women entrepreneurs offering services to the Oil and Gas Industry.
The agreements empower NEXIM to offer the services of Custodian/Fund Manager, while the Bank will also receive applications, disburse loans, and operate within the framework agreed by both parties. NEXIM has also agreed to provide counterpart funds of equivalent amounts in Naira under the two schemes, as a demonstration of its commitment to the partnership.
While explaining the rationale for creating the funds, the Executive Secretary of NCDMB, Engr. Simbi Wabote, indicated that the intervention has become necessary to empower indigenous companies to offer services in the upstream Oil & Gas Sector, thereby supporting skills acquisition, local content development and technology transfer. He emphasised that the scheme was also timely as it would mitigate the adverse impact of the Covid 19 pandemic on domestic service operators, many of whom had suffered losses and were at the verge of massive staff lay off.
Commenting on the role of NEXIM, the Managing Director/Chief Executive of the Bank, Abba Bello, noted that aside the provisions of its Establishment Act, which empowers it to offer Funds Management Services, the schemes align with the Bank’s strategic framework of developing and promoting services export. He observed that services currently contribute over 50% of Nigeria’s GDP, but Nigeria does not have significant footprint in services export, hence the need for deliberate intervention, particularly within the context of the African continental Free Trade Agreement, which offers opportunities in the regional market.
On the women fund, the NEXIM MD noted that the Bank has since identified the need for specific intervention schemes for the female gender, who contribute over 50% of Nigeria’s population, which was why the Bank launched the Women and Youth Export Development Fund (WAYEF) in March 2021. He noted that the Women in Oil & Gas Intervention Fund has similar objectives as WAYEF and that the scheme has created another avenue for NEXIM to support more women owned businesses towards increased social and economic inclusion of the female gender.