May 25, 2020

COVID-19: Reps seek enforcement of local content in all sectors of economy


House of Representatives

as Nigerian Local Content Development, Enforcement Bill scales second reading

By Levinus Nwabughiogu

House of Representatives

ABUJA-In what appears like a proactive way of tackling an anticipated harsh economic weather in the post  COVID-19 pandemic era, the House of Representatives has passed for the second reading a bill to enforce the participation of the Nigerian workforce in all the sectors of Nigeria’s economy.

The Bill titled “Nigerian Local Content Development and Enforcement Bill, 2020 is being sponsored by the Speaker of the House, Femi Gbajabiamila, Rep. Ochiglegor Idagbo, and 6 other lawmakers.

The bill when passed into law is expected to replicate and consolidate the gains recorded with the enactment of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, 2010 in other sectors of the Nigerian economy.

According to the sponsors of the Bill, the participation of the Nigerian workforce in the oil and gas sector has saved the country trillions of naira as a result of the NOGICD Act 2010.

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Accordingly, other sectors could also benefit from such initiative considering the new global realities of the need to look inward as dictated by the outbreak of the pandemic.

Idagbo while leading the debate said it has become imperative for local players in other sectors to be empowered for the post-oil and gas era to compete favorably in the international arena.

He said: “The proposed Bill also seeks to provide the legal basis for enforcement of Presidential Executive Orders 003 and 005 on local content signed by President Muhammadu Buhari.

“The gains so far made as a result of the enactment of the NOGICD Act, 2010 is record-breaking. Nigerians have greatly increased their expertise in petroleum exploration and now extend their businesses to neighbouring countries. Trillions in naira terms have been saved as a result of local participation in the oil and gas industry.

“Presently, Nigerians are involved in so many sub-sectors of the Nigerian Petroleum Industry as a result of strict monitoring of the activities of companies that before the coming into effect of the NOGICD Act 2010, usually ignore local labour and materials in the exploitation of our petroleum resources”.

The lawmaker also emphasized the need for the Nigerian economy to maximize the local content gains of the oil and gas sector.

“Extending the local content requirements beyond the Petroleum Industry to some other critical sectors like, ICT, Manufacturing, Agriculture, Power, Solid Minerals, Construction, health, etc, is now imperative as the country must look inward to assert and ensure her economic independence especially in the light of the current COVID-19 induced global economic scenario, which makes it imperative for countries to look inwards for economic growth and sustainability.

“The Executive arm of Government had even before the COVID –19 been thinking along this line thus leading to the issuance of the Presidential Executive Orders 003 and 005 on local content even before the appearance of COVID – 19, in the world.

“The time is now, for the country to depend on herself for her future survival without becoming a beggarly nation”, he said.

According to Idagbo, the Bill is also seeking the creation of local content departments in Ministries, Departments and Agencies of government (MDAs), in addition to making it a requirement for Nigerian Content Plan (NCP) on major projects (above N100 Million) outlining minimum Nigerian content thresholds for materials, labour, and services required on the project.

Another intendment of the Bill is to get Nigerian content requirements in the solicitation of bids, a requirement for Nigerian content compliance certificate as a pre-condition for contract awards, in addition to the creation of the Nigerian content Committee to develop economy-wide local content policy.

It also advocates for the creation of a robust Research and Development (R&D) ecosystem to drive homegrown technology development through provision to promote collaboration between research institutions, product developers, and end-users of Research as well as provision to incentivize funding of research by public and private sector entities.

Job creation as a drive to address unemployment was also strongly canvassed by the Bill with clauses on first consideration for Nigerians with requisite skills in all public-funded projects, provision to create a national database of available skills and requirements for approval and utilization of expatriates to only roles where there is an immediate skills shortage.

Capacity building to develop resilient local supply chain through the provision for targeted sector-specific capacity building programmes and requirement to close capacity gaps in education, infrastructure, facilities and vendor development on the back of projects were also sought for by the Bill

Sustainable Funding for local content is considered a priority by the Bill with a provision to create a Nigerian Content Trust fund dedicated to implementing projects and programmes connected to developing local content, while there is also another clause for the application of the Fund to develop SMEs through low-interest project-based financing schemes.

The socio-economic gains of the Bill included the promotion of local manufacturing and economic diversification with a focus on ICT, Agriculture, solid minerals, hydrocarbon refining, power, and manufacturing; provision for incentives to encourage local processing of hydrocarbon resources, the export of processed mineral & agricultural commodities, local manufacturing of equipment, machinery, spares, chemicals, ICT hardware, development of software, etc; and provision for standardization of locally made goods and locally sourced raw materials to make them competitive in the international market.

Also expected to be institutionalized is the preference for Nigerian made goods and services in all public procurements whereby Nigerian content philosophy becomes a key requirement in all public sector procurements.

The lead sponsored added that the bill will foster the needed cooperation among the Executive and legislature for the country’s economic development.

“The enactment of the Nigerian Local Content Development and Enforcement Bill will further strengthen executive-legislature synergy and oversight on local content administration in key sectors of the economy.

“It will also provide the necessary legislative backbone for the implementation of key initiatives that will evolve from the Presidential Economic Sustainability Committee as well as other policy actions by the Executive aimed at repositioning the Nigerian economy post-COVID-19,” Idagbo said.