• Thursday, February 22, 2024
businessday logo

BusinessDay

Stakeholders say investments in Oil and Gas sector discouraged by tax burdens

5 ways oil sector can jumpstart Nigeria’s economy in 2020

Stakeholders in the oil and gas industry, especially oil servicing subsector, have cried out saying the tax burden they are carrying is discouraging investments in the sector and demanded that the government makes some adjustments so that they can get some relieve.

The stakeholders who spoke on “Nigerian Content and Creating Conducive Business Environment” said local content is good but companies must be encouraged to grow, adding that the country has done well with the establishment of local content policy which has improved the participation of local companies when it is viewed from the perspective of where country is coming from.

One of the panellists at the Nigerian Content Seminar organised by CWC, organisers of  Nigerian Oil and Gas Conference and Exhibition taking place in Abuja, Godwin Izomor, group managing director and chief executive of MV Vowgas Group, said the Nigerian Content Development Fund put in place to  help local companies is good but that the government should encourage companies to grow and not stiffen them with draconic tax policies.

The fund he said is good but small when compared to the level of investments required in the Nigerian oil and gas industry and therefore demanded it should be increased.

The companies he said were supposed to be encouraged to grow as opposed to the current situation where most of them are being overtaxed. He advised the Nigerian Content Development and Monitoring Board (NCMDB) to intervene on behalf of local companies.

In other countries, according to him, governments help bail out companies from problems but the situation is not the same in Nigeria, adding that banks and policymakers are creating problems for the companies.

“There are so many opportunities in the Nigerian oil and gas industry but these opportunities could only be translated into so thing meaningful if the government provides a proper environment for the locals to operate. So we appeal to the government to give the companies breathing space,” he said.

Dele Aikhionbare, Head, Business Development Eroton Exploration and Production, in his own contribution, said the country had done well, looking at where she is coming from, saying that in the past if one looks, at contracts awarded in the oil and gas industry they were awarded to foreign companies but now the situation has changed. Their footprints have reduced.

He said many Nigeria companies can march their foreign counterparts in so many areas now. The industry and the government he said need to sit down and look at areas where there are gaps and close them through business-friendly policies.

In his own contribution to the discussion, Olayinka Oluwatimimehen, group chief executive, Amazon Energy, said the greatest threat to the local companies was lack of continuity because of bad investment climate.

He said there are over 4000 trained engineers in Nigeria that have deep water capabilities and needed to be continually engaged.

But Obinna Ofili, general manager, Nigerian Content Fund (NCDF) said the fears raised by Godwin Izomor were being addressed in order to provide a conducive  environment for ease of doing business.

He encouraged the promoters of local companies to put in place proper corporate governance structure in order to attract more investors.

 

Olusola Bello