The Nigerian Content Development and Monitoring Board (NCDMB) has called on oil and gas companies to set aside a percentage of their annual budget to fund research and development.

NCDMB said that the call was necessary to benefit from tax incentives derivable from such investment.

NDMB’s executive secretary, Simbi Wabote, made the call on Tuesday at the Nigerian Oil and Gas Industry Suppliers Tax Awareness Workshop in conjunction with the Federal Inland Revenue Service, FIRS, at the NCDMB Conference Hall, Yenagoa, Bayelsa.

Mr Wabote urged oil and gas industry players to take advantage of the Nigerian Content Development Fund in asset acquisition, contract financing, working capital, and manufacturing innovative and competitive products.

“Globally, there is a consensus on the adoption of the Triple Helix model to foster partnership between the academia, industry, and Government to foster market-driven research which advances the socio-economic development of nations. This tripartite collaboration requires the combination of human, financial and policy incentives to attract needed funding critical to the growth of research,” said the NCDMB chief.

Mr Wabote added, “It is on record how nations such as USA and Germany have used tax credit schemes to motivate researchers to look into ways of solving problems and enhancing creativity,” noting that countries like Egypt and Saudi Arabia also have similar arrangements in place to promote research and development.

“Egypt, for example, has investment tax allowances (ITA) for many related R&D sectors such as energy, engineering, and sciences. The UK created incentives to boost investment in R&D through their R&D tax relief scheme for small businesses and R&D expenditure credit scheme,” he explained.

He stressed that Saudi Arabia “has a tax deduction scheme available to R&D expenditures. Morocco also has incentives that span across several industries and corporate tax credits for R&D investments,” and in Nigeria, “we have also commenced our journey of creating meaning of addressing our peculiar challenges by leveraging on our natural endowments.”

According to Mr Wabote, the one per cent NCDF levy enshrined in the Nigerian Oil and Gas Industry Content Development Act 2010 is a typical example of a statutory provision to support local content development in the oil and gas sector.

“Indeed, access to the Nigerian Content Intervention Fund by the local supply chain has been one of the major contributors to the growth in local content level from less than 5 per cent in 2010 to 54 per cent in 2022,” he stated. “We are pushing for similar performance in research and development by sharpening our focus on the various elements that will enable the growth and appreciable impact of research and development in our economy.”

In 2019, NCDMB developed its 10-year research and development roadmap. He said the roadmap detailed dedicated research funding and requisite commercial framework as part of the success pillars for developing research in the Nigerian oil and gas sector.

“The roadmap is anchored on eight key pillars and 42 initiatives which we have been driving in the last four years. One of the key pillars is funding which led to the launch of the $50 million Nigerian Content Research and Development Fund to drive basic research,” Mr Wabote explained.

(NAN)