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Local Content Bill vital to preserving Nigeria’s socioeconomic independence — Hon Idagbo

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Says ‘ll strengthen executive-legislature synergy

Local Content Bill vital to preserving Nigeria’s socioeconomic independence — Hon Idagbo

Gabriel Ewepu – Abuja

As Nigeria braces for post-COVID-19 economic recovery, the member representing Bekwarra/Obudu/Obanliku Federal Constituency of Cross River State in the Green Chamber of the National Assembly, Rt Hon Legor Idagbo, Tuesday, stressed on the necessity of the Nigerian Local Content Development and Enforcement Bill 2020 to preserve Nigeria’s socioeconomic independence and positioning it on the path of rapid growth and development being Africa’s largest economy.

Hon Idagbo giving the background of the Nigerian Local Content Development and Enforcement Bill (the Bill) which is sponsored by Rep. Femi Gbajabiamila, himself (Idagbo) and seven other members of the House of Representatives explained why the nation at this trying time needs this Bill passed into law said is a remarkable legislative draft that seeks to expand the scope of local content in the NOGICD Act thereby putting the Nigerian economy in the hands of Nigerians, creating jobs and enhancing the value of indigenous businesses post COVID-19.

He further stated that so far, the key local content law in Nigeria is the landmark Nigerian Oil and Gas Industry Content Development Act 2010 (NOGICDA) which was enacted 10 years ago, establishing the Nigerian Content Development and Monitoring Board (NCDMB) and institutionalizing the concept of local content in the Nigerian oil sector.

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According to him, the enactment of the Nigerian Local Content Development and Enforcement Bill 2020 will 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.

He said: “The World Bank defines local content as a policy that has evolved from creating backward linkages by supplying input to the local economy through transfer of technology, the creation of local employment opportunities, and increasing local ownership and control.

“Local content is vital to preserving Nigeria’s socioeconomic independence and enhancing the ability of indigenous businesses to exploit local opportunities while staying globally competitive.

“So far, the key local content law in Nigeria is the landmark Nigerian Oil and Gas Industry Content Development Act 2010(NOGICDA) which was enacted 10 years ago, establishing the Nigerian Content Development and Monitoring Board (NCDMB) and institutionalizing the concept of local content in the Nigerian oil sector.

“It mirrored the successes of local content policy in countries such as Norway and Malaysia where local value creation from their oil sectors reached up to 75% according to United Nations Conference on  Trade and Development (UNCTAD). In 10 short years following the enactment of NOGICDA, Nigeria has witnessed increased participation of local firms in the oil sector, infrastructure development, job creation, and backward linkage development.

“In fact, trillions of Naira have been saved in the extractive industry with local firms now able to extend their businesses to neighbouring countries.”

The Federal Lawmaker also pointed out that there is need to deliberately add value and strength to indigenous businesses for positive growth and development towards creating a robust economy majorly dominated and controlled by Nigerians and that will lead to serious industrialization and private sector-driven economy that creates room for high-level competition, expansion, and productivity of businesses at all strata, which President Muhammadu Buhari issued an Executive Order in that regard but has some limitations.

“Recognizing the need to strengthen indigenous businesses, President Muhammadu Buhari attempted to extend local content policy beyond the petroleum industry to other critical sectors through his Executive Order 003 entitled “Support for Local Content in Public Procurement by the Federal Government” and Executive Order 005 entitled “Presidential Executive Order for Planning and Execution of Projects, Promotion of Nigerian Content in Contracts and Science, Engineering and Technology”.

“However, despite their best intentions, the Executive Orders are limited in scope and enforceability to the public procurement practices of Ministries, Departments and Agencies (MDAs) of the Federal Government who are by the orders, directed to prioritize contractual engagement with indigenous companies and maximize local capacity in all contracts and transactions regarding science, engineering, and technology.”

Meanwhile, he (Idagbo) called on Nigeria and other African countries to strongly look inwards and actualize independence, liberation, and socioeconomic freedom from foreign dominion and exploitation, and in the light of the current COVID-19 induced global economic outlook and to give local content policy the full force of law.

“Therefore, as we celebrate the Africa Day (May 25), commemorating Africa’s independence, liberation and socioeconomic freedom from foreign dominion and exploitation, and in the light of the current COVID-19 induced global economic outlook which has forced countries to look inwards for economic growth and sustainability, it has become imperative to give local content policy the full force of law, extending it beyond the Petroleum Industry to other critical sectors like, ICT, Manufacturing, Agriculture, Power, Solid Minerals, Construction, Health, etc.”

Interestingly, the Nigerian Local Content Development and Enforcement Bill 2020 has key provisions  and expected socio-economic benefits include:

  1. Promotion of local manufacturing and economic diversification with a focus on ICT, Agriculture, solid minerals, hydrocarbon refining, power, and manufacturing:
  2. 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.
  3. Provision for standardization of locally made goods and locally sourced raw materials to make them competitive in the international market.
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  5. Preference for Nigerian made goods and services in all public procurements:
  6. Nigerian content philosophy as a key requirement in all public sector procurements:
  7. Provision for the creation of local content departments in MDAs:
  8. The 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:
  9. Nigerian content requirements in the solicitation of bids:
  10. The requirement for Nigerian content compliance certificate as a pre-condition for contract awards:
  11. Creation of Nigerian content committee to develop economy-wide local content policy:
  12. Creation of a robust R&D ecosystem to drive homegrown technology development:
  13. Provision to promote collaboration between research institutions, product developers and end-users of Research
  14. Provision to incentivize funding of research by public and private sector entities
  15. Job creation drive to address unemployment:
  16. The first consideration for Nigerians with requisite skills in all public-funded projects
  17. Provision to create a national database of available skills
  18. Requirements for approval and utilisation of expatriates to only roles where there is immediate skills shortage:
  19. Capacity building to develop resilient local supply chain:
  20. Provision for targeted sector-specific capacity building programmes:
  21. The requirement to close capacity gaps in education, infrastructure, facilities, and vendor development on the back of projects:
  22. Sustainable Funding for local content:
  23. Provision to create a Nigerian Content Trust fund dedicated to implementing projects and programmes connected to developing local content;
  24. Application of the Fund to develop SMEs through low-interest project-based financing schemes.

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