FG Probes $500m Local Content Loans, Projects

Federal Government Probes $500 million Local Content Loans and Projects

The Federal Government says it is reviewing loans and projects estimated at $500m executed by the Nigerian Content Development and Monitoring Board (NCDMB).

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, who made the disclosure, also accused the past executive of the NCDMB of allegedly wasting about $500m on questionable projects and loans.

Lopkobiri disclosed this at a dinner held in Lagos last week by The Petroleum Club. During an interactive session at the event, Lokpobiri alleged that the past leadership of the NCDMB paid $35m for the Brass modular refinery in Bayelsa State without anything to show for it.

Also, he also claimed that $20m was paid for a fertiliser factory, which has yet to be seen.

The minister, however, commended the investment made in Waltersmith.

He explained,

“It is brilliant for the NCDMB to partner with potential investors to build modular refineries, but there are some cases. I give an example: In Bayelsa, there was the Atlantic Refinery that was supposed to be in Brass, my predecessor’s hometown.

“$35m was paid out by NCDMB, not even one block is there.

“Normally if the NCDMB is to make an investment, there is a disbursement threshold, but this $35m was released at once.

This is the same town that Simbi, the former NCDMB Executive Secretary also came from. When you go there you see an open field, not even one block.

“There is also the Brass Fertiliser, NCDMB also released $20m, empty field.

“So, NCDMB has made some very bad investments. In this case, NCDMB has disbursed about $19Om in different equity investments, and none of them, apart from the Waltersmith modular refinery, can you say is worth a good investment.

“But the NCDMB under my leadership will not do a thing like that.”

Lokpobiri claimed the former NCDMB boss made the payments against professional advice, stressing that the payments were being reviewed.

“Even when there are documents showing, ‘do not do this refinery of $35m’, it was done against the advice.

“The money was not paid in installments, it was paid at once.

“The NCDMB under my leadership is reviewing the entirety of those investments. $190m is almost N200bn, some states don’t have that kind of budget,” he added.

The minister mentioned that about $350m was taken to the Bank of Industry by the board to give loans to investors, while alleging that the fund was mismanaged.

“But what was in addition to the money that was taken to the BOI. The BOI had about $350m.

“Also, of those loans that were given, 90 per cent of them were non-performing. So, on the whole, you are talking of over half a billion dollars ($500m) wasted. We can’t follow the same trajectory, it doesn’t make any sense. We must do things differently. We are now reviewing the entire loans that were given out.

“Some people applied for a $10,000 loan, you gave them $500,000.

“On my salary as a minister, I earn less than N1m in a month; even if I am a minister for four years, I won’t even get up to N50m. So, imagine for somebody to make just one bad investment and then wipe away $35m.

“In the same location we have the Brass refinery, we have another $20m; we have $50m of investment.

“The same man-$35m, $20m, and there is another $50m – one man.

“He should be in jail. If it’s China, they will execute them, but Nigeria is a democratic nation.”

Speaking on a crisis between him and the incumbent NCDMB boss, Felix Ogbe, he said, “Some of you know there was some bad publicity against me that I was meddling in the internal running of the NCDMB. I am too busy to reduce myself from the minister to the head of one parastatal. I will never do it. But the NCDMB Act is different. Section 75 gives additional responsibilities to the council. There is a reason why the minister is the chairman of the council. It is to ensure that things are done after proper due diligence”.

Wabote debunks allegations

Reacting, the immediate past Executive Secretary of the NCDMB, Simbi Wabote, debunked all the allegations, saying “You cannot drag a man to want to destroy him without having facts and no evidence to back it up”.

Wabote said, “NCDMB does not interfere in the process you go through to obtain the loan. You go through the BOI because it takes the entire credit risk, and for any loan you take, you have to present a bank guarantee, and if you are not able to perform, BOI calls back the loan. So, the $300m that is given to BOI is the best loan scheme that this country has ever known.”

On the investments, he said NedoGas on Monday paid a dividend of $1m to NCDMB on one of the investments done with the company.

“You can also reach out to Waltersmith and ask them about the state of the equity investment the NCDMB made in their modular refinery. If it was all a bad investment, that would not bring dividends. As we speak, Waltersmith perhaps, would declare a profit-after-tax of maybe about N28bn or N20bn,” Wabote explained.

According to him, the Brass Fertiliser is an investment between the Nigerian National Petroleum Company Limited, the NCDMB and the Brass Fertiliser Company, adding that the Brass Fertiliser Company has been trying to get to financial close before it faced headwinds.

“NCDMB did not invest in it alone. NNPC was part of that investment,” he declared.

He informed that in Azikiel Hydroskiming Refinery, the NCDMB invested $20m, while the NNPCL invested up to $70m, expressing confidence that the refinery under construction would be completed next year.

Wabote, however, acknowledged that the Atlantic Refinery was the only investment facing challenges.

“Among the 15 investments that we made, the only investment that is challenged is Atlantic Refinery and the reason is not far-fetched. We invested in Duport Refinery and Petrochemicals in Egbokor in Edo State. As I speak, that project is 100 per cent completed, but there is a problem between the owner of the business and his partners, Summit Oil, and they all took themselves to court.

“They are in various courts challenging each other, and you know if there are issues in court, you have to wait for those issues to be concluded. The plan for the owner of the business was that if he got Duport Refinery going, whatever resources he had from Duport Refinery would be used to complete the Atlantic Refinery. That is the only project that is challenged out of the 15 investments we entered into.

“Before I left, we instituted a forensic audit to be conducted on that project, I am not too sure what the status of the audit is,” Wabote maintained.

The former NCDMB boss spoke further, “Today, if you go to BOI, ask them what is the interest that has accrued to NCDMB since the loan scheme started the then Minister Ibe Kachukwu. We have generated over N20bn into the account of NCDMB, and I’m telling you this authoritatively. You can reach out to the BOI. You cannot drag a man to want to destroy him without having facts and no evidence to back it up.

“But on whether these projects will be delivered, they will be delivered. Again, the only project that is currently challenged is the Atlantic Refinery. And for your information, the proprietor of Atlantic Refinery had written to NCDMB before I left, to buy us out. The letter is in the system. For your information, before I left NCDMB that organization was rated as the best-performing MDA in the entire country by the Presidential Initiative on the Ease of Doing Business.

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“Surprising that nobody is speaking about the 17-storey building NCDMB Towers we constructed and completed on record time and also the 10MW gas-fired power plant that we also built to provide uninterrupted power supply to the NCDMB towers; neither are they talking about the industrial parks that are being developed to support the present administration’s agenda of industrialisation. Those parks are projects I inherited and continued because it makes sense,” he concluded.

The former NCDMB boss was sacked by President Bola Tinubu in December 2023.