The Nigeria Content Development Monitoring Board (NCDMB) has craved the support of the insurance sector towards the implementation of the Nigerian Oil and Gas Industry Content Act (NOGICD).
NCDMB executive secretary Simbi Wabote, who made the call at the 2023 Oriental News Nigeria conference in Lagos, with the theme, “Building Local Content Synergy between the Oil and Gas and the Insurance Sector in Nigeria”, said the board has over the years taken deliberate steps to forge collaboration with various critical stakeholders to support the attainment of its strategic goals and mandate.
Wabote, who was represented by NCDMB director of corporate services Daziba Obah, said that stakeholders’ engagement and collaboration is one of the key enablers to the Board’s ten-year strategic road map designed to achieve 70 percent Nigerian content performance by the year 2027.
This he said is the reason for various engagements and collaborations between NCDMB and several MDAs, including the National Insurance Commission, NAICOM which crystalised in the joint issuance of the Insurance Guideline in 2022 to support the implementation of the insurance requirements contained in Sections 49 and 50 of the NOGICD Act 2010.
The main benefit of the guidelines, according to Wabote, is the creation of a database of all insurance programs procured by the operators, project promoters, alliance partners, and Nigerian indigenous companies, to enable the board to monitor utilisation of in-country insurance capacity thereby enhancing in-country value retention.
“It is worthy to emphasize that collaboration between government agencies is crucial for effective public service delivery through alignments of areas of strength, better decision-making, sharing of resources, optimization of opportunities and better understanding of issues and challenges with policy implementation.
“This ultimately, creates huge benefits for both country and citizens, as it enables collaborating agencies to understand and respond to the needs and expectations of Nigerians. In NCDMB, we recognize the importance of collaboration and synergy amongst government organizations and other stakeholders to the fulfilment of our statutory mandate,” he said.
The executive secretary described the theme of the conference as apt and timely as it underscores the imperative of fostering the much-needed collaboration and synergy amongst MDAs and critical stakeholders; in this case between two critical regulators in the Oil and Gas Industry and the Insurance Industry.
“There is no doubt that Nigeria has not extracted sufficient value across the Nigerian oil and gas industry value chain since the commencement of hydrocarbon mining in Nigeria. It is this very low indigenous participation in the hydrocarbon value chain in Nigeria that necessitated the enactment of the NOGICD Act in 2010 with the sole aim of deepening local content in the nation’s economy.
Speaking on seeming challenges, Wabote said, “Despite the commitment of both agencies to optimize the benefit of the NOGICD Act and the Insurance Act, there are still some obstacles in the way of full implementation. One of the challenges of utilizing Nigerian loss adjusters or brokerage firms is the low capital base of the insurance industry. Closely related to it is the capacity of local insurance firms to underwrite the huge loss associated with a typical upstream petroleum project.”
He said, however, that in response, NAICOM has made remarkable efforts to mitigate some of these limitations, but a lot still needs to be done.
The executive secretary added that in the spirit of collaboration, NCDMB is poised to work with NAICOM as a credible partner every inch of the way to get around some of these obstacles, particularly within the boundaries of our statutory mandate.
On the way forward he said the Board will not only look at the challenges of building sustainable synergies but will also come up with feasible proposals to encourage collaboration to surmount impediments.
“To address the issue of low capital base of the industry, for example, we call on all stakeholders to support NAICOM to push for an increase in the minimum capital base of insurance companies.
“Secondly, NAICOM and other stakeholders need to also work assiduously to forge and promote mergers of insurance companies to enhance their efficiencies and improve their market share as part of their collective benefits.
I am aware that some steps have been taken in this direction, but these efforts need to crystallize into reality,” he added.
