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Court affirms Nigerian Content Development and Monitoring Board mandate to collect 1% NCDF levy

The Federal High Court sitting in Yenagoa, Bayelsa State has confirms the authority of the Nigerian Content Development and Monitoring Board (NCDMB) to collect the one percent Nigerian Content Development Fund (NCDF) levy from every contract awarded in the Nigerian oil and gas upstream transaction

Penpushing reports that the confirmation was contained in a landmark judgement delivered on Tuesday, as the court declared that this is as mandated under section 104 of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.

The Nigerian drilling companies known as Incorporated Trustees of the International Association of Drilling Contractors (IADC) had instituted a case against the Nigerian Content Development and Monitoring Board (NCDMB), seeking to stop the collection of one percent Nigerian Content Development Fund (NCDF) levy.

Penpushing further reports that International Association of Drilling Contractors (IADC) in the lawsuit reference number FHC/YNG/CS/178/2022 challenged the powers of Nigerian Content Development and Monitoring Board (NCDMB) to demand the one percent Nigerian Content Development Fund (NCDF) levy from their members and contractors, contrary to the clear provisions of section 104(2) of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.

The act states that the sum of one percent of every contractawarded 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.”

Penpushing also reports that in the same vein, the group  obtained an ex parte injunction against the Board prohibiting the demand, collection or anything whatsoever either by itself or through its agents, representatives, or privies in relation to Nigerian Content Development Fund (NCDF) payment or remittance from their members and contractors pending the final determination of the lawsuit.

The Executive Secretary of Nigerian Content Development and Monitoring Board (NCDMB) Simbi Kesiye Wabote confirmed on Wednesday that the board vigorously contested the issues in court and effectively countered the arguments of the plaintiffs.

Penpushing reports that he explained that,hence, on Tuesday 9 May 2023, the Federal High Court finally gave judgment in favour of the Board, dismissing the suit and prayers of the plaintiffs as wholly incompetent, baseless and that the suit did not disclose any reasonable cause of action.

The Executive Secretary said the interim injunction earlier granted ex parte on the 19 July 2022 was also vacated, adding that the decision would strengthen the Board’s resolve and commitment to Nigerian content implementation regardless of any headwind or distraction.

Penpushing reports that Nigerian Content Development Fund (NCDF) is Nigerian Content Development and Monitoring Board (NCDMB) only source of funding sequel to the exit of the Board from federal allocation in 2017/2018.

The Nigerian Content Development Fund (NCDF) is applied towards funding the implementation of Nigerian content development in the Nigerian oil and gas industry, notably projects, programmes and activities directed at increasing Nigerian content in the oil and gas industry.

Penpushing further reports that one of the judicious applications of the Fund is the very successful credit scheme extended to Nigerian oil and gas businesses through the Nigerian Content Intervention Fund (NCI Fund), managed by the Bank of Industry (BoI) and the Nigerian Export-Import Bank (NEXIM-Bank).

The other notable utilizations of the Nigerian Content Development Fund (NCDF) are the development of Nigerian Oil and Gas Parks Scheme (NOGAPS), equity participation in notable third-party ventures, Human capacity development initiatives, and the institution of the Nigerian Content Research and Development Fund as well as other R&D initiatives.

Penpushing also reports that other applications are 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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