By Els William
Nigerian SMEs in the oil and gas services sector have been given a significant financial shot in the arm: the Nigerian Content Development and Monitoring Board (NCDMB) in partnership with the Nigerian Export-Import Bank (NEXIM) have disbursed about US$42 million to local companies. The funds are designed to deepen indigenous participation, build capacity, and help bridge the gap between operators in Nigeria and their counterparts globally.
At the “Deepening Local Content through Certification, Compliance and Financing Support” forum held in Port Harcourt, Muhammed Z. Awami, Head of Specialised Business at NEXIM, delivered the disclosure. He said:
“Once you meet pre-disbursement conditions, we disbursed the funds to you … When it’s time to repay, we expect that repayments are made by the beneficiaries so that we can also lend again to other people … the fund Working Capital and Capacity Fund is US$30 million but so far, we have disbursed about US$42 million.”
Although the Working Capital & Capacity Fund was originally set at US$30 million, demand and eligible applications pushed the disbursement past its initial allocation.
Traditional bank loan requirements—heavy collateral, stringent upfront documentation—often shut out many smaller operators. Recognizing this, NEXIM and NCDMB have adapted by using assignments of receivables, insurance and other non-physical collateral to ease access. The loans are also structured to be “self-liquidating,” meaning the transaction financed generates cash flow to service repayment, reducing dependency on fixed assets. Application processes have been streamlined, though challenges remain around awareness and capacity building.
Awami urged registered Nigerian oil service providers, especially those with contracts from International Oil Companies (IOCs) and National Oil Companies (NOCs), to take advantage of the fund.
Meanwhile, Felix Omatsola Ogbe, Executive Secretary of NCDMB, speaking through a representative, emphasized that the forum is not just for announcing funds but for engaging stakeholders on certification, compliance, and financing. It’s all about ensuring that Nigerian operators can participate meaningfully in the value chain.
The Bank of Industry (BoI), represented by Gabriel Yemidale, also added perspective on the Nigerian Content Intervention Fund (NCI Fund), which started in 2017 with about ₦200 million and had grown to ₦300 million by 2023. He underlined that only those contributing the mandatory 1% local content levy become eligible for certain windows of this Fund.
The financing move is widely seen as timely, especially as the industry confronts rising costs, supply chain disruptions, and the need to build local capacity. But success isn’t guaranteed, and certain hurdles persist. A substantial number of applicants are unable to fulfill strict documentation or collateral requirements. Low compliance with the 1% NCDF remittance law means many potential beneficiaries are excluded from participating. Monitoring and follow-up remain necessary: funds may be disbursed, but ensuring they are used effectively is another challenge.
This $42 million represents more than finance—it signals a commitment to shift Nigeria’s oil and gas sector from foreign dominated operations toward a more indigenous, competitive, resilient landscape. For many SMEs, this could be the difference between surviving and scaling. Yet, real success will depend on execution: simplifying application processes, ensuring inclusion (especially for community contractors and women-led firms), sustaining repayment discipline, and keeping the finance windows fluid and transparent.
Given how essential local service providers are to the upstream and midstream segments of oil and gas, failure to deliver on transparent, accessible financing could mean stunting the industry’s growth. But if done right, this move could mark a turning point—a moment when Nigerian SMEs move from the margins to center stage in their own industry.