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.