Local content policies implementation to drive FG’s oil reforms -Kachikwu

The strategic implementation of the local content policies will be the fulcrum of ongoing reforms by the federal government in the oil and gas sector, Ibe Kachikwu, minister of state for petroleum resources has assured.

Kachikwu said strong government demand for local content investment through creation of infrastructural facilities and insisting work be done in Nigeria should be of paramount importance.

The minister in his keynote address at the Sustainability in the Extractive Industry (SITEI) conference in Abuja Wednesday said once local content is strategically implemented, there will be more fabrication yards in the country which will boost our industrial sector and reduce the cost of production, and thus maximising government revenue.

While speaking on the topic ‘Establishing the Framework for globalising our local Economy‘, the minister observes that Nigeria’s perception as a high-risk investment destination in some quarters is partly because the process of structuring a project financing deal with financing institutions is usually complicated and daunting; hence policies must be consistently directed at improving confidence in the investment environment.

According to him, “Nigeria as an emerging economy needs an effective local capital market that is properly regulated and supervised to bridge the huge infrastructure gap that exists in the oil and gas infrastructure sector”

He opine that as the country contends with financial challenges in revamping our economy, Capital market is very crucial to facilitating infrastructure financing and proper repositioning of the economy.

Kachikwu further said Nigeria, with her vast resources, can get to draw in more revenues if the cost of production is considerably reduced to the neighbourhood of $15/ barrel, adding that this will be achieved through our cost reduction initiatives in conjunction with implementation of the New National Fiscal policy.

“Work need to be done to bridge gap between our local industry and international players through communicating and branding our local content in fostering investment and making the foreign investors see it as an opportunity rather than an obligation”.

“We are in a phase of development where the issue of infrastructural framework has become critical. Our downstream infrastructure deficit alone requires us to invest around 10 billion dollars in the next three decades”.

He insist that strengthening liquidity in the capital market is very crucial as doing more to increase capitalisation will bring more activity into the capital market with a multiplier effect on our local economy.

In his words, “Nigeria can never be an economic power house without a vibrant local economy and defined industrial base. A nation without a solid manufacturing base, is a sure way to maintaining dependency and waste of resources

The minister further restated the need to ensure a conducive business atmosphere devoid of infrastructure gaps is paramount to ensuring stability and high productivity and a better framework for globalising our local economy.