Addressing Nigerian and foreign investors when he received a delegation of multinational industrial giant, General Electric (GE), led by its Vice Chairman and Chief Executive, John Rice, at the Presidential Villa, he said the Federal Government would do everything possible to maintain domestic economic stability.
Urging the company to maintain its confidence in the country, the President said: “We promise our people that even with the drop in oil prices, the economy will be stable.
“I urge you to maintain the confidence you have in this country before the oil price drop, and even expect better management from us.
“Sometimes, it is when you are challenged that you do better than when everything looks good.
“So, I assure you, other investors in this country and all Nigerians that the government will do everything necessary to stabilise the economy and that the drop in the price of crude oil will not create so much distortion in our economy,” he added.
The President thanked GE for its commitment to increase its investment in Nigeria with the attendant benefit of job creation for many more Nigerians, and also welcomed the firm’s plans to set up a facility in Calabar to manufacture components for the oil and gas sectors.
Also speaking, Rice told the President that GE has committed about $30 million to the development of the Calabar Plant and was already undertaking the training abroad of some Nigerians who will work there.
Despite the President’s promise and going by the unfolding scenario, the Federal Government may just be forced to once more review downward its oil benchmark again.
Data by Dunn Loren Merrifield, a Lagos-based investment banking group, showed the Organisation of Petroleum Exporting Countries (OPEC) basket price of crude oil sold at $67.31 per barrel; while at 15.18 GMT on Thursday, Brent crude sold at $69.21/b, very close to the new $65/b benchmark.
Both the OPEC price and Brent sold at $106.92 and $107.71/b respectively last January.
The visit by the team to the Presidential villa came shortly after the emergence of construction giant, Julius Berger Nigeria Plc, as the preferred bidder to build GE’s multi-modal manufacturing and Assembly facility in Calabar Nigeria.
Julius Berger has also been contracted to build a training facility on the manufacturing site that ensures on-going employee development. In the facility, GE would provide one-year to four-year training programmes locally and internationally for repair engineers, welders, fabricators, machinists and special processing.
Rice announced this in Abuja during a courtesy visit on the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke.
He said the $1 billion investment is in fulfilment of the pledge made last year by GE Chairman, Jeff Immelt, in January 2013.
Of this amount, $250 million is for capital expenditure that will make Calabar a regional hub for manufacturing, service, and innovation. The facility will have an improved ability to support a broader range of product lines in power generation as well as oil and gas exploration and production.
GE, in a statement, also pledged to spend an additional $800 million over five years in local sourcing of goods/ services, labour, staff welfare and training.
Meanwhile, as part of the contract, GE has signed agreements with United Bank for Africa, Zenith, Fidelity Bank, Citibank, and Ecobank to provide up to $500 million financing to the suppliers.
The deal is to provide favourable financing terms, supported by GE, with each of the banks providing a line of credit from $50 million to $100 million with favourable interest and terms.
This is in addition to GE partnership with the Nigerian Content Development Fund (a subsidiary of the NCDMB) to provide further financing options and enhancements.
Speaking in Abuja, President and CEO of GE Nigeria, Dr. Lazarus Angbazo, explained that the move represents a watershed in supplier financing and efforts to boost government’s local content policy in the oil and gas and other sectors.
He said pre-qualified suppliers, who would benefit from the loan facility are new and established Nigerian companies, assuring also that GE would use its substantial purchasing volume to underpin the banks and their financing facilities.
For Angbazo, “with the investments in the Calabar plant, GE plans to significantly increase its supplier base from 40 local suppliers to 100 within the next five years.”
He added that GE would continue to support SME suppliers with supplier business development services and technical development support to assist suppliers in meeting GE global supplier qualification criteria.
Minister of Industry, Trade and Investments, Dr. Olusegun Aganga, who chaired the event, praised the parties for their focus on stimulating industrial growth in Nigeria.
He challenged the banks to be even more creative “to bring the same range of competitive financial products for small businesses as exist across the globe.”
On his part, the Executive Secretary of the Nigerian Content Development and Monitoring Board, Dr. Ernest Nwapa, commended GE for the initiative which, he said, would result in job creation, skill and technology transfer.
Nwapa noted it was another important scorecard for efforts by the present administration to ensure that Nigerian companies directly benefit from the foreign direct investment in the country.
GE’s financing partners who spoke at the event commended the efforts to support the growth of small and medium size enterprises, expressed pride at being part of the initiative.