NCDMB Clarifies Stance on Compulsory Three Percent Human Capital Development Fund, Other Issues
By Prosper Okoye
The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, clarified the rationale behind mandating a three percent Human Capital Development (HCD) fund for oil and gas companies undertaking projects exceeding $1 million.
During the ongoing 12th Practical Nigerian Content Forum, Wabote said that the board does not collect the funds from the companies.
This follows claims from the Independent Petroleum Producers Group (IPPG) Chairman, Abdulrazaq Isa, stating that the remittance of the fund amounted to multiple levies. “To this extent, I would like to encourage the NDCMB to review certain aspects of our regulations that may potentially work against the competitiveness of Nigeria’s oil and gas sector in the global marketplace. A case in point is the human capital development training requirements, where industry participants are required to set aside 3 percent of project costs for projects above $1 million to conduct local content training,” Isa said.
However, Wabote countered, “NCDMB doesn’t demand that money from you. It is money that you keep, and you are supposed to use it to build human capacity in the country. If you go around and look at the human capacity index of Nigeria, it is among the poorest in the world. Hence, we need to build capacity.”
He noted that the few experts in the industry are overused and would eventually fade away without anyone to replace them. “The idea behind this fund is for you, the oil companies, to think, as in, this is the money that the law said to keep aside. You should then devise a strategy with which to deploy that money to build human capacity. That’s why NCDMB collaborated with PTDF to develop a skill centre of excellence in Port Harcourt. We started building the facility along the airport road, then we went to the IPPG and said, ‘Look, come on board. Use whatever HCD money you have to help develop this centre so that we can build capacity in the industry for the future. because all the professionals will fade away. Where are the young ones? When we want to employ them, we say they don’t have the experience. How do they gain that experience?”
Other issues clarified:
In his opening remarks, Wabote also dispelled some assertions or narratives about the board and its activities.
“Ladies and gentlemen, is it true or false that NCDMB is very buoyant and awash with money? The answer is false.
The fact is that the 1% NCDF remittance on contracts awarded is dwindling due to the lull in the industry. Through prudent and judicious use of the fund, we have grown it to a sizeable amount that could be leveraged for intervention and our operational needs.
The fund has 68% of it placed with BOI and NEXIM Bank as intervention funds, and 32% is utilised for our partnerships. These placements have enabled us to attract some yields and capital appreciation while still fulfilling our mandate.
“Is it true or false that our 17-story headquarters building is wasteful and underutilized? The answer is false. We only have 3 floors out of the 17-story building available for rent. We are in discussions with one of the telecom companies, a bank, and a well-known operator with a huge footprint in Bayelsa for office space to let within the Nigerian Content Tower.
This narrative about underutilization reminds me of the story about the Federal Secretariat in Abuja, which is now congested even though it was considered too big at the time of construction.
“Is it true or false that NCDMB plans to relocate its headquarters to Abuja? The answer is definitely false. We are still here seven (7) years after some people took us to court on the unsubstantiated rumor. We are also building a 200-room conference hotel next door to the headquarters that is ‘pencilled’ for relocation.
I receive hundreds of letters all the time asking for and even demanding employment, as there is the perception that NCDMB could employ staff as it likes. This is incorrect. Please know that, as an agency of the Federal Government, we cannot carry out employment as we like. There are several layers of approval required to employ individuals in the public service.
“Another one is that NCDMB is partaking in areas outside its mandate. This is false.
Section 70 of the NOGICD Act (2010) is very unambiguous on the functions of NCDMB. Sixteen functions of the Board are listed under the provision, and I had to dedicate my keynote address at the last NOG Nigerian Content Seminar to list out our functions, including the evaluation of NC Plans, monitoring of NC Performance, carrying out research and investigations, organising conferences and workshops, developing capacities and capabilities of local contractors, implementing Ministerial Regulations, delegating any of its functions to any agent or operative, and doing anything legally necessary to enable the Board to carry out its function.
It is, therefore, not true that we carry out activities outside our mandate as contained in the NOGICD Act.” Wabote added.