Stakeholders in the oil and gas industry have called on the federal government to extend the Nigerian Content Law to other sectors of the economy.
According to them, adopting a bespoke approach which would consider the peculiarities of the various sectors intended to be covered would further open up the economy and create the much needed industrialization the country craves for.
This was contained in a communique issued at the end of the 5th edition of the Annual Valuechain Magazine Lecture and Awards which was held recently in Abuja.
The event had as its theme: “The Impact of Nigerian Content Law: Taking a Cue from the Successes in the Nigerian Oil and Gas Industry.”
It is estimated that before the enactment of the NOGICD Act 2010, Nigeria lost over $380billion to capital flight and 2 million jobs within a 50-year period. Also, the country lost the opportunity cost for in-country capacity development and value addition.
“Through pragmatic application of certain provision of the NOGICD Act 2010, the NCDMB has recorded various landmark achievements in the oil and gas industry within 12 years of its existence and grown Nigerian content level from 5% to 42% as at December 2021,” they said.
Participants at the event observed that one of the factors increasing cost is the local content provision, a situation where an important project has to be done but the local content provision is making it economically unviable.
To address this, the industry operators urged the National Assembly to look into provisions in the NOGICD Act 2010 that impose fiscal burden on existing and new investors with a view to reviewing it saying Nigeria cannot afford projects not going forward due fiscal burden.
They observed that Local content laws exist across the different sectors with various levels of successes in implementation but monitoring of compliance and enforcement are major challenges for regulators.
“The MDAs with responsibilities to monitor or implement local content have a lot of learnings from what the NCDMB has done.
The National Assembly should rather consider a sector by sector local content law approach as lumping the sectors together will not promote efficiency and effectiveness. The oil and gas sector is unique so also are other sectors like ICT. Therefore each sector will require a different bespoke local content approach.
Local content implementing agencies should not see themselves as pro-government or enforcing government law but to see themselves as protecting the investors. The success of local content depends on manpower development and deployment.
“Nigerians should be strong advocates of the promotion of locally developed goods and service,” they further recommended. Part of the observation of the Valuechain Lecture bordered on the need for the pragmatic implementation of the Nigerian Content Law in the oil and gas industry by the NCDMB with the support of critical task of nation-building and the actualization of some of the federal government’s policies and initiatives under President Mohammadu Buhari, particularly the drive for job creation, decade of gas, ease of doing business, diversification in the context of the economic recovery and growth and plan (ERGP).According to them, “the landmark achievements under the Nigerian Content Law leave visible footprints in the production records of indigenous operators, in-country capital retention, development of infrastructure, vendor development and supply chain efficiency, engineering and technical services, fabrication capability, human capacity development, job creation, asset ownership, procurements, manufacturing of critical oil and gas tools and components, and most importantly a paradigm shift in project execution philosophy of operating and service companies in Nigeria.
“The President has continued to reinforce local content practice in the industry through his total support for the Board’s programmes as well as the issuing of Executive Orders (EO: 3 & 5) that aim to promote local content in the public procurements and projects.
“There are currently before the National Assembly, three different bills seeking to extend local content law to other sectors. The Nigerian Oil and Gas Industry Content Act (Amendment) Bill 2020 (58.417); the Nigerian Local Content Development and Enforcement Bill 2020 (58.419); and the Nigerian Oil and gas Industry Content Act 2010 (Repeal and Re-enactment) Bill 2020 (58.420),” they said.
