Business
NCDMB, FIRS Offer Tax Incentives For Oil Industry R&D Investments
Modupe Asudo
Oil and gas companies desirous to reduce their tax burden and grow profitability should consider increasing investments in research and development (R&D), with a view to taking advantage of the incentives provided in existing fiscal laws, the Nigerian Content Development and Monitoring Board (NCDMB) and the Federal Inland Revenue Service (FIRS) have canvassed.
The Executive Secretary, NCDMB, Engr. Simbi Kesiye Wabote and the Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami stated this on Tuesday in Yenagoa, Bayelsa State, at the one-day Nigerian Oil and Gas Industry Suppliers’ Tax Awareness Workshop jointly organized by the two organizations at the NCDMB Conference Hall.
Delivering the keynote address at the event, the Executive Secretary NCDMB stated that the Finance Act 2021 and other extant tax codes relating to Research and Development provide attractive tax incentives for oil and gas firms that invest in R&D.
Executive Secretary NCDMB, Engr. Simbi Kesiye Wabote speaking at the one-day Nigerian Oil and Gas Industry Suppliers’ Tax Awareness Workshop jointly organized by the NCDMB and FIRS on Tuesday in Yenagoa.
He hinted that many oil and gas companies were oblivious of the opportunities that exist within Nigerian tax laws for the oil industry to harness from investing in Research and Development. He reiterated that such workshops provide the necessary education and enlightenment that enable businesses to position themselves appropriately to benefit from making R&D an integral part of their business model.
He observed that the low level of R&D funding by private companies is partly linked to inadequate information. He regretted that “the consequence is not only significant capital flight in the acquisition of technology required for oil and gas projects and operations, but also players in the sector are tied to the apron and direct control of the foreign supply chain who control the technological advances arising from their R&D activities.”
Wabote cited examples of leading Fortune 500 companies that commit between 5- 10% of their annual budgets to R&D, which enables them to produce innovative products and make significant tax returns to the Government and create huge employment opportunities.
L-R: (3rd left) General Manager Planning, Research and Development, Nigerian Content Development and Monitoring Board (NCDMB), Alhaji Abdulmalik Halilu; Director, Planning, Research and Statistics, NCDMB, Mr. Daziba Patrick Obah; Executive Secretary, NCDMB, Engr. Simbi Kesiye Wabote and (7th left); member NCDMB Governing Council, Mr. Mina Oforiokuma and other speakers at the one-day Nigerian Oil and Gas Industry Suppliers’ Tax Awareness Workshop jointly organized by NCDMB and Federal Inland Revenue Service (FIRS) on Tuesday in Yenagoa, Bayelsa State.
Speaking further, the NCDMB boss expressed hope that the workshop will change the gross underfunding of research in Nigeria, which is currently estimated at less than 0.2% of the national budget. He insisted that operators can no longer neglect R&D, insisting that it is key to local content development, enhancement of future tax revenue to Government, development of home-grown solutions and retention of industry spending within Nigerian financial institutions.
He remarked that “that 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% in 2010 to 54% in 2022.”
He hinted that the Board is “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.”
The Executive Secretary identified funding as one of the key pillars of R&D, and that informed the launch of the $50 million Nigerian Content Research & Development Fund to drive strategic programmes and developments in the R&D ecosystem.
He however insisted that Government should not be the sole financier of R&D, pointing out that “the bulk of R&D funding should come from the private sector who are business owners and will ultimately benefit directly from the research outcomes.”
The Executive Secretary affirmed that the conference was organized in line with Section 70 of the Nigerian Oil & Gas Industry Content Development Act 2010 which mandates NCDMB to organize conferences and other public education fora to develop local content in the Nigerian oil and gas industry.
He added that the Board is leveraging the Enabling Business Environment pillar of its 10-year Strategic Roadmap, to collaborate with the FIRS in creating a platform for engaging oil and gas industry stakeholders, with a view to highlighting the inherent benefits of investing in R&D, for the private sector and government entities.
In his remarks, the Executive Chairman, Federal Inland Revenue Service, Mr. Muhammad Nami reiterated that “Research and Development (R&D) have been identified as a veritable means for companies that want to remain competitive and profitable in today’s rapidly changing business environment.”
L-R: (2nd left) General Manager Planning, Research and Development, Nigerian Content Development and Monitoring Board (NCDMB), Alhaji Abdulmalik Halilu; Director, Planning, Research and Statistics, NCDMB, Mr. Daziba Patrick Obah; Executive Secretary, NCDMB, Engr. Simbi Kesiye Wabote and (6th left); member NCDMB Governing Council, Mr. Mina Oforiokuma and other speakers at the one-day Nigerian Oil and Gas Industry Suppliers’ Tax Awareness Workshop jointly organized by NCDMB and Federal Inland Revenue Service (FIRS) on Tuesday in Yenagoa, Bayelsa State.
Nami who was represented by his Senior Special Assistant, Mr. Gabriel Ogunjemilusi provided details on Federal Government’s tax regime, incentives, and related facts. He stated that: “Allowable deduction of up to 10% of amount of reserve made out of the profits of a period by a company for research and development: claim of capital allowance on capital expenditure on plant and machinery used for R&D activities; pioneer status tax holiday for R&D Companies; companies and other organizations that invest in R&D facilities for commercialization can claim a tax credit of up to 20% of the cost of their qualifying expenditures.”
He assured participants that the Federal Inland Revenue Service (FIRS) will continue to support all companies in Nigeria to take advantage of available fiscal incentives provided by the Nigerian tax laws.
The Workshop attracted renowned finance and legal experts who spoke on “Provisions of the NOGIC Act on R&D, R&D Operating Model and Imperatives on Success,” “Royalty Potentials from R&D Investments,” and “Constraints of Investing and Way Forward.”
The national oil company of the Republic of Congo, the Société Nationale des Pétroles du Congo (SNPC) and Dangote Petroleum Refinery & Petrochemicals (DPRP) are discussing a strategic partnership aimed at strengthening the Republic of the Congo’s supply of refined petroleum products.
The parties also have on the agenda, advancing regional energy cooperation and industrial integration across Africa, Biztellers can report.
SNPC Managing Director, Maixent Raoul Ominga, who led a delegation from his country on a visit to the DPRP, described the facility as a strategic asset for Africa and expressed the national oil company’s interest in developing a long-term partnership with Dangote.
“We have visited this remarkable refinery, which represents a major industrial achievement for Africa. The Republic of the Congo has refining capacity and we are keen to explore strategic cooperation that will help strengthen the supply of refined petroleum products while creating value for both organisations,” Ominga said.
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Discussions between both organisations, he said, focused on opportunities for collaboration in refining, petroleum products supply, energy security, industrial development, and knowledge sharing.
He praised the Dangote Group for demonstrating that Africa can successfully finance, build and operate world class industrial infrastructure, describing the refinery as an important milestone in the continent’s industrial transformation.
Ominga also commended the Group’s investments in the Republic of the Congo, particularly in the cement sector, noting that they have strengthened local industrial capacity, expanded production and improved access to construction materials.
On his part, President and Chief Executive of Dangote Industries Limited (DIL), Aliko Dangote, reaffirmed the Group’s commitment to Africa’s industrialisation through value addition, regional partnerships and investment across the continent.
“We are for Africa, not just Nigeria. Tell us what you need, and we will see how we can work together,” Dangote said.
He noted that the refinery has established a new benchmark for fuel quality in Africa by producing petroleum products that meet the highest international specifications, while improving access to cleaner fuels and reducing the continent’s dependence on imported refined products.
In the same vein, the Vice President, Oil and Gas, DIL, Devakumar Edwin, outlined the Group’s long term expansion strategy, which will increase its total refining capacity to 2.1 million barrels per day, comprising 1.4 million barrels per day in Nigeria and a planned 700,000 barrels per day refining complex in Kenya to serve East African markets.
He also disclosed plans by the Group to invest an additional US$46 billion between 2026 and 2028 across its refining, cement and fertiliser businesses as part of its drive to accelerate industrialisation across Africa.
The engagement underscores the shared commitment of SNPC and the DPRP to deepen African energy cooperation, strengthen regional value chains and promote greater self sufficiency in refined petroleum products as the continent advances towards enhanced energy security and increased intra African trade.
Also present at the meeting were Group Executive Director, Commercial, Oil and Gas, DIL, Fatima Aliko Dangote; Adviser to the President of the Republic of the Congo, Peggy Ndongo and advisers to the SNPC Managing Director, Aymar Ebiou and Norbert Mabiala.
As part of efforts to protect Nigeria’s oil revenues and energy infrastructure, the Nigerian Navy recently recovered approximately 22,870 litres of suspected illegally refined Automotive Gas Oil (AGO) in Rivers State.
It was gathered that the value of the seized petroleum product is put at about N39 Million.
The seizure, carried out under Operation Delta Sentinel, is part of an ongoing security intervention designed to disrupt illicit petroleum supply chains which the Navy says continue to undermine government earnings and legitimate operators in the oil and gas sector.
According to the Navy, personnel of Nigerian Navy Ship (NNS) SOROH acted on intelligence reports and intercepted a wooden boat transporting 36 sacks of suspected illegally refined diesel in the Orashi Forest area of Okolomade Community, Abua/Odual Local Government Area of Rivers State.
In a media statement, Director of Information, Nigerian Navy, Captain Abiodun Folorunsho, revealed that further aerial surveillance and ground searches uncovered an additional 45 sacks of the product concealed under vegetation and inside ponds, bringing the total recovery to 81 sacks containing about 22,870 litres of AGO.
Navy Captain Forunsho stated that the operation highlights the growing use of intelligence and surveillance technology by security agencies to tackle crude oil theft and illegal refining activities, which industry stakeholders say contribute significantly to production losses, environmental degradation and reduced government revenue.
According to him, disrupting the logistics networks supporting illegal refining operations is critical to improving transparency in the petroleum value chain and safeguarding investments in Nigeria’s oil-producing region.
“The recovered products and the wooden boat used for transportation were handled in line with established anti-crude oil theft procedures.
Meanwhile, the Chief of Naval Staff, Vice Admiral Idi Abbas, reaffirmed the commitment of the service to sustain intelligence-driven operations aimed at dismantling criminal networks involved in oil theft and protecting the nation’s strategic economic assets.
Business
Tanzania, Dangote Group Explore Multi-Billion-Dollar Investments in Infrastructure, Energy, Fertiliser
President Samia Suluhu Hassan of Tanzania has held high level talks with President and Chief Executive of Dangote Industries Limited, Aliko Dangote, on a major expansion of the Group’s investments in Tanzania.
Biztellers reports that the discussions focused on transport infrastructure, fertiliser production, power generation, ports and regional trade.
The meeting, held at the State House in Dar es Salaam, reaffirmed the long-standing partnership between Tanzania and the Dangote Group while opening discussions on a new phase of investments aligned with the country’s industrialisation and economic transformation agenda.
Speaking after the meeting, Dangote said Tanzania remains one of Africa’s most attractive investment destinations, noting that the Group had identified several strategic sectors capable of delivering significant economic value.
“We have identified areas that can deliver significant value for Tanzania, and we are ready to work together to develop them for our mutual benefit,” he said.
The discussions covered a broad range of projects, including port development, the construction of a 40-kilometre concrete access road to support port operations, development of a special trade zone, a proposed 2,000-megawatt coal fired power plant, a urea fertiliser plant and transport infrastructure linking Mtwara with Mbamba Bay in southern Tanzania.
Dangote also explained the commercial and technical considerations behind the Group’s decision to locate its planned East African refinery in Lamu, Kenya, while extending an invitation to the Government of Tanzania to participate in the investment.
President Samia welcomed the Dangote Group’s continued confidence in Tanzania and directed relevant ministries and government agencies to commence detailed technical discussions on the proposed investments in line with the country’s legal, policy and development priorities.
She also appointed the Minister of Planning and Investment to coordinate the strategic partnership with Dangote Industries Limited, with both sides expected to begin formal negotiations in the coming days.
A Tanzanian government delegation led by the Minister is expected to visit Nigeria to advance discussions and develop implementation frameworks for the proposed projects.
According to a statement from the Directorate of Presidential Communications, the Government remains committed to strengthening partnerships with the private sector as part of efforts to mobilise productive investment, accelerate industrialisation, promote technology transfer, and create sustainable employment opportunities.
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Dangote Industries already operates one of Tanzania’s largest industrial investments through its US$500 million cement plant in Mtwara, which has an annual production capacity of three million tonnes and supplies both the domestic market and neighbouring countries.
The latest engagement deepens the partnership between Tanzania and the Dangote Group and reinforces the company’s position as one of Africa’s leading private sector investors driving regional industrialisation, infrastructure development, and economic integration.
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