Local Content: Patronage of WAV, others to reduce $8bn capital flight- Reps

The House of Representatives Committee on Local Content has said that the patronage of West African Ventures (WAV) and other indigenous companies will help reduce capital flight and further promote local content.

 Investigation reveals that Nigeria loses an estimate of $8 billion as capital flight due to award of contracts to foreign companies by International Oil Companies (IOCs) in line with the directive of the Nigerian Content and Development Act signed into law on April 22, 2010 by former President Goodluck Jonathan.

 The committee also promised to cancel oil and gas contracts awarded by IOCs to foreign companies where there is in-country capacity to execute such contracts by indigenous companies.

Emmanuel Okon, chairman, House of Representatives Committee on Local Content, disclosed during an inspection of shipyard and fabrication complex operated by West African Ventures at Onne in Rivers State, that poor patronage of WAV shipyard, fabrication complex and marine facilities of other indigenous companies in the sector, has worsened capital flight in the oil and gas industry.

 According to him, the committee decided to have a physical examination and assessment of facilities put in place by WAV and other indigenous companies, so as to avoid supporting indigenous contractors, otherwise known as flight by night contractors- acting as commission agent for foreign companies in Nigeria. “ We believe that companies such as WAV with huge investment within the country as employer of over 5,000 Nigerians should be encouraged so that the investors can do more. That way, we will reduce capital flight (money that is going out of this country significantly),” he noted.

 Okon noted that the patronage of indigenous companies with capacity would boost revenue earnings of the economy, save more money and create more employment opportunities by encouraging investors that have shown credibility and super quality in its business.  

 His words: “What we have seen here is 100 percent Nigerian company and by that law, this company (WAV) is supposed to be patronised first by the IOCs, where they need marine services. That’s what the law says and the law is not ambiguous but explicit. It says wherever there is a Nigerian competence, there is an in-country capacity and there’s a job within the oil and gas industry. The law states that the IOCs or whoever is giving out that contract, should first of all give a Nigerian company the right of refusal.”

He added, today, IOCs would say they are doing local content but I think the best they can do for Nigeria is to patronise indigenous companies like WAV so that they can in turn engage Nigerians teeming unemployed youths.

The committee chairman admitted that issues relating to inadequate patronage were a fall out of the global crisis in the oil and gas industry and a deliberate intention by the IOCs not to patronise the companies. It however urged that this intention is repositioned to promote local content.