NIGERIAN CONTENT POLICY: IMPLEMENTATION STRATEGIES AND DEVELOPING INDIGENOUS CAPACITY
The above subject formed the fulcrum of the Nigerian Bar Association (NBA) Section on Business Law (SBL) Six (6) Hours business discussion sessions held on August 24, 2010, at the on-going NBA Annual General Conference, holding in Kaduna State.
Local content means the development of local skills, technology transfer, use of local manpower and local manufacturing. This had become an increasingly important issue that could support the Federal Government of Nigeria to upgrade her manpower capacity, with results that benefit the government, private companies, and Nigeria’s economy; hence the enactment into law on Thursday, April 22, 2010 of the Nigeria Oil and Gas Industry Content Development Act 2010 (the “Act’).
The enactment of the “Act’ seeks to increase Nigerian participation not only in oil and gas industry thereby increasing Nigerian participation in the upstream and service sectors of the Nigerian energy industry but also seeks to regulate support services in the sector as well. These support services include but are not limited to financial, insurance and legal services.
The objective of local content in the Nigerian context are to:
- Increase value-added content, thereby contributing to national economic development as well as that of our stakeholders, partners, clients, company, employees and contractors.
- Transfer technology and develop local know-how.
Hence foreign companies wishing to operate in the Nigerian Oil & Gas industry amongst others must increase their Nigerian content to meet new government target via a number of suitable arrangements including joint ventures, partnerships, sub-contracting or other mutually suitable vehicles, etc.
Under the Act as well, Nigerians shall be given first consideration in the award of oil blocks, oil field licenses, oil lifting license and shipping service and all project for which contracts are to be awarded in the industry; subject to the fulfillment of such conditions as may be specified by the Petroleum Minister; and there shall be exclusive consideration for Nigerian indigenous services. It will also check a situation where jobs are given to unqualified personnel just because they are Nigerians, it will be appropriate to give such jobs to qualified foreigner who can satisfactorily execute the jobs.
The NBA-SBL since inception has assumed the responsibility of providing the link to interface with the Government, Regulators, Legal jurists and industries thus creating a meeting of minds for relevant deliberations between industry experts on pivotal issues in our nascent democracy. This year, it was to deliberate on the Local Content Legislative framework towards efficiency in the nation’s economic development to enable stringent focus on positive and competitive economic growth in furtherance of excellence in a globalised business environment.
Present at this epoch deliberation were stakeholders and captains of industries in the Energy (Oil & Gas), Telecommunications, Maritime and Manufacturing sectors of the Nigerian economy; and the task was to analyse and evolve strategies on maximizing the effectiveness of the “Act” in the Nigerian economy.
In analyzing the “Act”, the discussants at the session came to the conclusion that in actualizing the objectives of the Nigerian government’s economic agenda for development, the Nigerian Local Content initiative will turn out to be a major driver of the economy; and a Nigerian local content policy that is properly implemented will have tremendous positive impact on all the sectors of the economy beyond the Oil & Gas.
Specifically, the “Act” as enunciated by Mr. Rotimi Odusola, Senior Manager, Commercial Legal Services, MTN Communications Nigeria Limited, addresses issues pertaining to:
- Social development
- Local currency
- Encouragement of local and foreign investment
- Promotion and Protection of local businesses/investments
- Patronage of local resources: human and material
- Discouraging imports and encouraging exports
The above, he continued reflect the need to invest substantially in local content in order to benefit from appreciable and sustainable development which will ultimately lead to enviable growth in the economy. Thus the need to vigorously enforce the Local Content Policy.
Further, he noted however, that like every other notable venture, the Local Content policy had its Challenges which were identified as follows:
- The regulated sectors are largely technology based and require huge investment in procuring and deploying such technology
- Inadequate or lack of access to financing
- Experienced personnel
- Local industry for the manufacture of necessary equipments
- Technical/Professional training
Drawing from the Peugeot Automobile Nigeria (PAN) experience, and the fact that local manufacture of vehicles peaked in the 1980s, as well as the number of local automotive component manufacturers. Engr. Austine Okolo, Deputy Group Head, Industrial, PAN emphasised that to forestall the reoccurrence of such decline in local content development experienced in the manufacturing sector and guarantee consistent progress, it is important that a sound implementation strategy be adopted.
The strategies to dealing with the challenges were itemized as follows:
- Effective development and monitoring of the Legal Frame Work for the Nigerian Local Content Development
- Nigerian local content policy should be Clearly defined the vision, outlining government objectives and outlining policy guidelines should be clearly enforced.
- Constitution of regulatory agency(ies) to enforce Nigerian local content regulation with set targets & penalties.
- Curriculum Development in educational institutions;
- Deliberate educational policies intended to develop knowledge and expertise is required to provide a steady flow of technical proficiency;
- Internal industries policies for full and fair opportunity to Nigerians (Gives room for competition and encourages investment in human capital available in Nigeria. Companies should be encouraged to develop policies aimed at satisfying this requirement);
- An enabling environment needs to be developed for the manufacture of technical equipment which will be able to compete globally;
- Development of the Service industry;
- Development of social infrastructure and resultantly the attraction of skilled Nigerians in diaspora to fill the temporary vacuum in the technical capacity in the varying sectors of our economy;
- Professionals and professional bodies such as the NBA should seize the tremendous opportunity offered to provide continuous capacity building and industry interface with the Government and industry regulators.
Highlights of the deliberations were the following:
- The important of developing skills in furtherance of a globalised business environment
- Continuing Legal Education
- Capacity Building and Training
- Research and Development
- The role of Government in creating the enabling environment for business development in successfully implementing the “Act”
Flowing from the above, it was emphasised that Capacity building thus ensuring the competence of the entire industry and its workforce is necessary towards exploring the window of opportunity provided by the “Act”.
The NBA-SBL Session alongside the team of panelists in conclusion, canvassed the need for every sector specific local content legislation, especially the need for a local content regime in the automobile sector. Furthermore, that a broad-spectrum approach should be adopted in establishing a Nigerian local content policy. There should be deliberate effort by the government to encourage enhancement of local content in all pivotal sectors of the economy especially in oil & gas, automotive & transport, building & construction sectors.
Broken down in basic terms, the various industries have the responsibility of building capacity and enabling competence in their respective sectors, while the Government owes a duty to create the enabling business climate and environment for the effective implementation of the “Act”; by the provision of necessary and basic infrastructure to enable focus on economic development.
And One Last thing …
Transfer of the SBL Leadership Baton …
“There is no new Administration. I have worked with George for the past four (4) years … what we will do going forward is to pursue and conclude on the SBL outstanding projects …”
These were the opening comments of the new NBA Section on Business Law (SBL) Chairperson, Mrs. Mfon Usoro as she emphasized the ‘THRUST OF HER BRAND NEW REGIME’ on her introduction to the SBL AGM, on August 24, 2010 at the SBL Session on Local Content Strategy Implementation.
The New Chair emphasised enhanced communication to and from the SBL members by the Council and its Committees, encouraged volunteering on the part of the members, the evolvement of well meaning and intellectual competitions for the benefits of the Young Lawyers Committee (YLC); and concluded that the SBL will continue to work as an extension of the NBA in encouraging the drive for legal specialisation.
We welcome the indefatigable Mrs. Mfon Usoro as the new Chair of the NBA Section on Business Law. May your tenure be very productive and may our hands as members of the SBL not be too heavy or weary to help you accomplish your goals for the SBL.
Obozuwa E. Dominic