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Technology transfer: Non-compliance by Chinese firms worrisome, by NOTAP boss

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By Emeka Aginam

While Nigerian market  remains  porous to   foreign vendors who  operate without compliance to regulatory requirements , many Chinese firms operating in the country are yet to comply with technology transfer  agreement  despite several projects implemented by these  firms.


These Chinese  firms, who operate in the country without playing by the rule of the game,  it was gathered are not limited to oil and gas, railways, ICT , roads construction, agriculture, among others

This development which poses  great danger to the economy, according to keen observers,  must be reversed immediately  so as to save the country from being a digital slavery to  many nations of the world, especially India and China.

Just last week, the Director General of the  National Office for Technology Acquisition and Promotion, (NOTAP) Dr Umar Bindir who disclosed this to CyberLIFE in an online interview  raised alarm over the implication of non compliance of technology agreement by foreign vendors even as he   warned on possible   digital  colonization of Nigerian market by the foreign vendors in a way of technology transfer without adequate regulation.

He  also disclosed that technology transfer agreement was  missing in  the oil and gas sector which  our economy literally depends on.  “But  we don’t  even know what technologies they are using” he said.

Part of the challenge in enforcing technology transfer agreement, according Dr Bindir   is quality of  information and lack of training.

“To harness or enforce these, you need very high quality staff who are very well motivated to do the job. We are still struggling to meet these standards to ensure that we protect Nigeria as mush as we can. The whole secret is to get Nigerians well skilled to see technology. At the moment we have serious limitation in this.

“I can honestly say that it is well at least with those who register their transfer agreements with NOTAP. Unfortunately we don’t see such agreements from the oil and gas sector which is  very unfortunate, a sector that our economy literally depends on.

“God knows how they remit  the huge amounts of money they make here. May be because they sell crude overseas, they do not need our office, but at least they should register the technologies needed by law.
“Also amazingly, despite the many projects implemented by Chinese firms in Nigeria, we do not  see their agreements in NOTAP which is quite surprising and worrying. Spots of this nature are the main compliance challenges, but most companies do comply.

“What you see us doing in NOTAP is not actually easy to do but it is very strategic. There is no  country that has made progress without having full control of its Science and technology dynamics and Nigeria cannot be different” he added.

According to him, there are laws  and regulations sponsored by the Federal Government of Nigeria through National Office for Technology Acquisition and Promotion (NOTAP  for Technology Transfer agreements, adding that it is compulsory for foreign investors to strictly adhere to these laws to achieve easy entry into the Nigerian market.

Meanwhile, all applicants for Technology Transfer Agreements, according to Dr Bindir  should be governed by the following rules:

* Technology contracts should include a provision whereby the recipient enterprises in Nigeria acquires explicit rights for the use and exploitation of the technology in question, and the period covering these rights should be clearly specified in the contract.

* In cases where the Nigerian enterprise is acquiring the right to practice a process, the concept of know-how should be clearly expressed and defined in the contract. In this connection, concepts such as “technical information” or “technical services” should only be treated as complementary to the know-how.

* Provision for capacity building must be part of all Agreements signed, and details on the Nigerians understudying the experts should be readily available/submitted, to ensure that skill is domesticated.

* All contracts should make provision for deduction of appropriate local taxes, such as withholding tax, etc.
*All agreements should incorporate research activities carried out in-house and also in collaboration with the Nigerian National Innovation System such as Universities, Research Institutes, private laboratories, Polytechnics, etc.

* Companies which sell imported products should separate the net sales of the imported products from the net sales of the locally manufactured products and this should be reflected in their Audited Accounts. Payment of technology fees should be based only on the locally manufactured products.

* All Nigeria Government Projects must be governed by Nigerian Laws of Arbitration and the seat of arbitration should be in Nigeria.

(h) There would be no approval for agreement based on assembling of Completely Knocked Down (CKD) parts brought into the country except payment for short term technical services relating to such project.

* The scope of services in technology transfer agreements should clearly state the services to be rendered by the transferor/licensor.

* The technology content of the agreement should state the methods for the domestication of technology, local raw material development, skills acquisition, etc.
* .A detailed plan for the local development and production of raw materials used in manufacture, as substitute for imported raw materials.

* Companies sourcing over 75% of its raw materials from abroad will not enjoy enhanced technology transfer fees, in particular, if it has been in operation in Nigeria for more than 5years without making efforts to source its raw materials locally. Companies in this category should render Technical Support Service and encourage indigenous entrepreneurs in that sector to produce raw materials or intermediary products that will meet the required standard.

* Evidence of registration of intellectual property e.g. trademark, patent, know-how
* Technology transfer agreements relating to food items such as bread, noodles, sausage, etc will no longer be approved because there is no technology content.

Payment will only be approved where the agreement is for short technical services for installation, commissioning of plants, training, etc to enable the recipient company commence operation. However, 1-2% of net sales may be approved for a start-up company involved in this type of business to enhance its smooth take off, among others.

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