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Nigerian Government Sign $1bn MoU Investment Plan With General Electric

The federal government yesterday signed a Memorandum of Understanding (MoU) with General Electric (GE) for the implementation of a $1 billion investment plan in Nigeria.

The MoU follows a January 2013, $1 billion investment plan for Nigeria that was announced by GE’s Global Chairman, Mr. Jeff Immelt, out of which $250 million will be earmarked for capital expenditure of the construction of a multi modal manufacturing and assembly facility in Calabar, Cross River State.

The planned facility, which 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, is expected to make Calabar a regional hub for manufacturing, service and innovation, Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, said during the MoU signing ceremony in Abuja.

She further said that the MoU covers an additional $800 million which GE has pledged to spend over five years in local sourcing of goods and services, labour, staff welfare and training. The project will also cover the reconstruction, upgrade and training for lecturers of the Government Technical College, Ikot Iffanga, a project whose contract has already been awarded by GE. Alison-Madueke also said the Nigeria content philosophy is now a key part of all projects in the oil and gas sector, adding that the event validates government’s “long held view that local content and localisation of the oil and gas industry is indeed achievable within the right regulatory framework”.

The minister, who noted that the project when completed would create at least 2,300 direct and indirect jobs, stated that the foreign direct investment is not an end in itself. “Clearly investments of this nature will translate into job creation. There are technology transfers, skill transfers, transfers of capabilities that were never there before as well as SME growth. So the multiplier effect of this sort of project is quite numerous,” the minister said. She further disclosed that the project would be commissioned by President Goodluck Jonathan himself, and urged the Nigerian Content Development Monitoring Board (NCDMB) to ensure that the laws of the land are closely followed to the letter as regards local content upon completion of the project.

Alison-Madueke also pledged government’s continuous commitment to creating enabling environment to companies like GE to progressively create value for the Nigerian economy and for themselves as investors. Also speaking at the event, Vice-Chairman, GE Global, John Rice, pledged the company’s commitment to the Calabar project for which Julius Berger has emerged the preferred bidder for the construction.

He also stressed that GE was committed to the project and that such commitment has not wavered in the face of falling oil price. “We are aware that government is taking necessary action to deal with the situation. We are still investors; we are a long term investors and our commitment to follow through on this doesn’t change one bit,” Rice said. According to the parties, significant construction of the project is expected to commence in January 2015, while first production of the factory is planned to take place in July 2016 with the entire project expected to be fully completed by the end of second quarter (Q2) of 2017. Speaking at the ceremony, President Goodluck Jonathan assured Nigerians and foreign investors that the Nigerian economy would remain stable despite the drop in global oil prices.

According to Jonathan, His administration would strive hard to maintain domestic economic stability. In this wise, he urged the company to maintain its confidence in the country. “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” Jonathan said.

He thanked GE for its commitment to increase its investment in Nigeria with the attendant benefit of job creation for many more Nigerians.

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