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© OKN MEDIA PUBLISHING 2022 - All rights reserved
Energy & Oil

Court Ruling Establishes NCDMB’s Power to Collect 1% NCDF Levy

Muhammad A. Aliyu
By Muhammad A. Aliyu
Published: May 11, 2023
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In a significant victory for the Nigerian Content Development and Monitoring Board (NCDMB), the Federal High Court has affirmed the Board’s mandate to collect the one percent Nigerian Content Development Fund (NCDF) levy from every contract awarded in the Nigerian oil and gas upstream transaction.

The judgment, delivered on Tuesday, settles the case brought against the NCDMB by the Incorporated Trustees of the International Association of Drilling Contractors (IADC), who sought to halt the collection of the NCDF levy.

The lawsuit, filed under Suit No.FHC/YNG/CS/178/2022, contested the authority of the NCDMB to demand the one percent NCDF levy from the IADC members and contractors.

However, the court ruled in favor of the NCDMB, emphasizing that section 104(2) of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act clearly stipulates the deduction and payment of one percent of every contract awarded in the upstream sector to the NCDF.

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“The sum of one percent of every contract awarded to any operator, contractor, subcontractor, alliance partner or any other entity involved in any project, operation, activity, or transaction in the upstream sector of the Nigeria oil and gas industry shall be deducted at source and paid into the Fund,” stated the NOGICD Act.

Furthermore, the IADC had obtained an ex parte injunction against the NCDMB, restraining the Board from demanding or collecting the NCDF levy until the final determination of the lawsuit.

However, with the court’s recent judgment, the interim injunction has been lifted, allowing the NCDMB to continue its collection efforts.

Commenting on the court’s decision, Engr. Simbi Kesiye Wabote, the Executive Secretary of the NCDMB, expressed satisfaction with the outcome, stating, “The Board vigorously contested the issues in court and effectively countered the arguments of the plaintiffs. The judgment has affirmed our authority and dismissed the suit and prayers of the plaintiffs as wholly incompetent and baseless.”

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Wabote further emphasized the NCDMB’s unwavering commitment to implementing Nigerian content, regardless of any obstacles faced. He highlighted the significance of the NCDF as the Board’s sole source of funding since its exit from federal allocation in 2017/2018.

The funds collected through the NCDF are instrumental in driving Nigerian content development in the oil and gas industry, supporting various projects, programs, and activities aimed at increasing indigenous participation.

One notable application of the NCDF is the successful credit scheme offered to Nigerian oil and gas businesses through the Nigerian Content Intervention Fund (NCI Fund), which is managed by the Bank of Industry (BoI) and the Nigerian Export-Import Bank (NEXIM-Bank).

Additionally, the NCDF has contributed to the development of the Nigerian Oil and Gas Parks Scheme (NOGAPS), equity participation in third-party ventures, human capacity development initiatives, the establishment of the Nigerian Content Research & Development Fund, and various research and development projects. Other projects include the construction of the 17-storey Nigerian Content Tower, entrepreneurship schemes and competitions, and the ongoing construction of the Conference Hotel Project (CHP).

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ByMuhammad A. Aliyu
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Muhammad Ameer Aliyu, is a prolific journalist who joined Okay Nigeria in 2015 with the aim staying committed to bringing more positive growth to the digital news platform. He is the Senior Editor at Okay Nigeria.
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