Stakeholders canvass for full implementation and monitoring for greater dividends
In 2010, the Federal Government signed the Nigerian Content Bill into law and it became known as the Nigerian Content Oil & Gas (NCOG) Act 2010.
Undoubtedly, trillions of dollars in goods and services will be procured over the next ten years, and beyond, for the exploration and development of oil, gas and mineral resources, power generation, agriculture, amongst others. Over the same period, more trillions of dollars’ worth of goods and services will be procured by public and private companies, as well as, official development agencies, to construct water, power, buildings and transportation infrastructure. These are in addition to the purchase of associated manufactured equipment and components.
However, the question is how much of this expenditure will be required to be discharged through purchasing locally provided human and material resources, goods and services made and provided in Nigeria – the country in which this expenditure is to be invested?
Stakeholders across all sectors have stressed that the NCOG Act has the potential to create millions of jobs within and outside the oil and gas sector in the coming years as it is geared towards increasing the domestic share of the $18 billion annual spending on oil and gas from 45% to 70%.
Nevertheless, they are worried that in the last six odd years of the Local Content Act, implementation has not been very favourable and encouraging as expected. For example, in the cable industry, there is an aspect of the law in reference to the cable and electric wires for low voltage production which says ‘90 meters of every 100, must be locally purchased’. This has not been adhered to. Records show that even 5% has not been met.
They pointed out that the enthusiasm of the IOCs and some stakeholders looking for solutions at the beginning is waning and believed this is one of the tactical reasons why the local content board needs to actually push for effective implementation to meet the target objectives of 90%.
They submitted that the local content law in the oil and gas sector will bring change to the business landscape with more local firms raising funds and acquiring assets in the industry, getting involved with the legal work, acquiring the technical know-how and managing the resources. This has encouraged the establishment of facilities where components of industry equipment could be manufactured locally. Today, more Nigerians are participating in the exploration and production of fuel, as well as, fabrication, engineering and marine transportation. This has the potential to create wealth and raise the country’s GDP.
Meanwhile, apart from the obvious capacity gap, there is a continuous misinterpretation of the Act leading to abuse and unrestrained use of contract staffing and casualization in key sectors contrary to the global trends and practice. This calls for the active support of statutory bodies such as the Immigrations, Customs, and Nigerian Police, amongst others.
In addition, the National Assembly, all the State Houses of Assembly in Nigeria need to monitor the implementation of the Act to deliver greater dividends to their constituents whilst host communities and the various community development committees are also enjoined to do the same.
In the same vein, keen industry watchers maintained that Nigeria can be fully industrialised through a sound Local Content Policy for the entire country as this will encourage foreign partners and investments which will eventually develop and project the nation’s market as a forerunner in the ECOWAS region.
In a media chat, recently, Mario Portoluppi, Managing Director, Nivafer Steel Construction Company Limited, expressed satisfaction that Government’s objectives for the local content policy initiative are quite noble but have remained unrealized, especially in the expansion of the upstream and downstream sectors, diversification of the sources of investment into the sector such that some of the funds would begin to come from local sources, promotion of indigenous participation, and the fostering of technological transfer.
He was confident that the implementation of the policy in the Power and Manufacturing Sectors will be a welcome development to go into other sectors like power and manufacturing which will also encourage local industry participation.
This conviction resonates with the Local Content Group of the Manufacturers Association of Nigeria (MANLOC), a stakeholders’ forum created to set a platform for manufacturers to promote the ideals of the Federal Government of Nigeria initiative towards local content (Nigerian Content Act of 2010) and its further development into a national policy for the entire country whilst ensuring compliance to requisite standards.
MANLOC lists the benefits of full implementation of the Local Content to include creation of jobs, cultivation of inter-firm linkages, accessibility to technology transfer, building of human capital and physical infrastructure, generation of tax revenues for governments, provision of a variety of products, services to consumers and other businesses.
Vasilly Oye, Chairman, MANLOC, when speaking about his passion about the Nigerian Content said his passion for the Local content is tied to the passion for survival of Nigeria which is tied to the survival and future of the people and the entire business community.
He explained that as government wants more value creation, each of these contributions has multiplier effects on a country’s development. To him, there is the need for a political will, as well as, a clear and genuine mindset from all stakeholders (not only the MDAs) in our economy involving developmental institutions and banks such as the Bank of Industry (BOI), multinationals, private companies, groups and associations like the Manufacturers Association of Nigeria (MAN), Nigerian Employers Consultative Association (NECA), Non-Governmental Organisations (NGOs), everybody must have the same zeal to push, promote and make local content work. There must be a legal framework that will explain how the policy will be administered. In addition, we need to fund the institutions of government that will be in charge of the policy”
He concluded that Nigeria has to design a strategy and implement her own local content policy in consideration with the country’s own peculiarities – a kind of home-grown industrialisation policy for the entire country.
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