The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Wabote, has expressed concerns about the impact of International Oil Companies (IOCs) divesting onshore oil and gas assets on the federal government’s tax revenues. Mr. Wabote conveyed these concerns during a breakfast meeting with newspaper editors recently in Abuja.
He criticized indigenous players who have acquired these assets for not fulfilling their tax obligations, which is adversely affecting government revenue. Wabote emphasized that some of these indigenous Nigerian companies, despite their acquisitions, have stopped paying taxes, contrary to the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010.
The decline in government tax revenues due to non-payment of taxes by some indigenous players who acquired onshore assets was also highlighted. Wabote stated, “We also found out that the government’s tax revenues are dropping because some of the indigenous players who acquired the onshore assets have refused to pay tax.”
In addition, some indigenous firms have argued for exemptions from the NOGICD Act’s implementation, citing their primary investors as Nigerians.
Wabote listed common violations by indigenous firms, such as undertaking projects without obtaining prior approvals, neglecting mandatory Human Capacity Development Initiative (HCDI), not utilizing vendors with approved Nigerian Content Equipment Certificates (NCEC), and engaging services of contractors not registered on the Nigerian Oil and Gas Industry Joint Qualification System Portal (NOGIC JQS), among other infractions.
Wabote underscored the importance of compliance with the Nigerian Content Act, noting, “It is very surprising to see local companies undermine and flout the Nigerian Content Act despite being the immediate beneficiaries of the Nigerian Content policy, thereby causing capital flight, loss of jobs, and missed opportunities for technological development.”
He commended indigenous companies preparing to acquire divested assets and reminded all industry stakeholders that the provisions of the Nigerian Content Act apply to all entities and activities connected to the Nigerian oil and gas industry.
On a positive note, Wabote mentioned that with the implementation of the NOGICD Act and the divestment of assets by IOCs, indigenous players have significantly increased their participation in the oil and gas sector. They now contribute to 15 percent of Nigeria’s oil production and 60 percent of the country’s domestic gas supply.
