NCDMB warning over mandatory 1% levy
The Nigerian Content Development and Monitoring Board (NCDMB) has issued a firm warning to oil and gas operators, contractors, and service companies over strict compliance with the mandatory one per cent Nigerian Content Development Fund (NCDF) levy, signaling a new phase of enforcement in Nigeria’s oil and gas regulatory framework.
The NCDMB warning over mandatory 1% levy comes amid mounting concerns that several operators may have failed to fully comply with statutory remittance obligations tied to upstream oil and gas contracts.
The Executive Secretary of the NCDMB, Felix Omatsola Ogbe, reaffirmed that the mandatory one per cent NCDF levy remains a legal requirement under Section 104 of the Nigerian Oil and Gas Industry Content Development Act, 2010. 
He stressed that all companies involved in upstream oil and gas activities must remit one per cent of the value of every contract into accounts officially designated by the board. The NCDMB warning over mandatory 1% levy makes clear that remittances made outside approved accounts will not be recognised as valid payments.
This renewed NCDMB warning over mandatory 1% levy also introduced stricter regulatory consequences. According to the board, companies that fail to comply will be denied access to critical regulatory approvals, certifications, and documentation required for oil and gas operations. 
These include project approvals, equipment certification, and operational clearances.
Why the 1% levy exists
The NCDF levy is not simply a regulatory tax. It is a strategic development instrument designed to promote indigenous participation in Nigeria’s oil and gas industry.
The NCDMB warning over mandatory 1% levy highlights that funds generated through the NCDF are deployed to support local contractors, finance capacity development, provide training, and improve access to affordable financing for Nigerian companies. 
The ultimate objective is to reduce reliance on foreign firms and strengthen Nigeria’s domestic industrial capabilities.
Under the law, the levy applies to all upstream contracts involving exploration, drilling, production, and related services. This ensures that a portion of oil industry revenue directly supports local economic development. 
Compliance certificate now mandatory
As part of enforcement reforms, the NCDMB warning over mandatory 1% levy introduced a strict requirement for companies to obtain a Nigerian Content Development Fund Compliance Certificate.
This certificate serves as official proof that a company has fulfilled its NCDF obligations. Without it, companies will not be able to access NCDMB regulatory services or approvals. 
Industry stakeholders have been urged to regularise their compliance status immediately to avoid operational disruptions.
The board also clarified that applications and verification processes are now fully digital, allowing companies to submit documentation and payment evidence through an online portal. 
https://ogelenews.ng/ncdmb-warning-over-mandatory-1-levy
Legal backing reinforces enforcement powers
The legal authority behind the NCDMB warning over mandatory 1% levy has been upheld by Nigerian courts.
A Federal High Court ruling affirmed that the NCDMB has full legal authority to collect the one per cent levy from upstream oil and gas contracts, reinforcing the board’s regulatory powers. 
This judgment removed legal uncertainties and strengthened enforcement mechanisms.
The ruling confirmed that the levy applies to all upstream contracts and must be remitted in accordance with the law.
Strategic importance to Nigeria’s oil industry
The NCDMB warning over mandatory 1% levy comes at a critical time when Nigeria is pursuing aggressive reforms aimed at increasing indigenous participation in the oil and gas sector.
Over the past decade, Nigeria has made significant progress in expanding local content levels, but compliance gaps remain a persistent challenge.
Experts say strict enforcement of the levy is essential to sustaining local content growth and ensuring long-term industry sustainability.
The NCDF has supported multiple initiatives, including industrial parks, financing schemes, and training programs designed to empower Nigerian companies.
Economic and regulatory implications
The NCDMB warning over mandatory 1% levy carries significant implications for oil companies operating in Nigeria.
Companies that fail to comply risk regulatory delays, project disruptions, and potential financial penalties.
Conversely, strict enforcement could strengthen Nigeria’s local industry, increase job creation, and enhance economic diversification.
The move also signals Nigeria’s determination to enforce regulatory discipline and protect national economic interests.
A turning point for compliance enforcement
Industry observers say the NCDMB warning over mandatory 1% levy marks a turning point in Nigeria’s oil and gas regulatory enforcement.
For years, compliance enforcement has been inconsistent, allowing some operators to delay or avoid remittance.
The board’s renewed warning signals a shift toward stricter enforcement and stronger regulatory oversight.
Ultimately, the success of the levy depends on consistent enforcement, industry cooperation, and transparent fund management.
If properly implemented, the levy could play a transformative role in strengthening Nigeria’s oil and gas industry and empowering indigenous companies.
https://punchng.com/ncdmb-issues-warning-over-mandatory-1-oil-fund-levy
