The Implications of the Presidential Executive Order No. 5 and Update on the Federal Governement’s Palletization Policy

President Muhammadu Buhari on Monday 5th February 2018, signed Executive Order 5 into law to improve local content in public procurement with science, engineering and technology components. The Executive Order demonstrates the Federal government’s efforts to promote the application of science, technology and innovation within Nigeria. This is a step towards achieving the nation’s developmental goal of improving all sectors of the economy.

In the proclamation entitled ”Presidential Executive order 5 for planning and execution of projects, promotion of Nigerian content in contracts and science, engineering and technology,” the President directed all Ministries, Departments and Agencies to engage indigenous professionals in the planning, design and execution of national security projects. However, in carrying out these duties. the Ministry of Interior shall ensure that all Expatriate Quota for projects, contracts and programmes are granted in line with the provisions of the Immigration Act and other relevant laws. Some of the directives in the order include;

  1. The Federal Inland Revenue Service (FIRS) and the Ministry of Finance shall ensure that tax incentives are granted to companies with existing tools (including foundry, machine shop, forge shop, and indigenous artisans) to boost local production of their products. Also, tax incentives may be granted to Small & Medium Enterprises and foreign firms for the utilisation of local raw materials that are authenticated by the Raw Materials Research and Development Council (RMRDC);
  2. Companies or firms duly registered in Nigeria, with a valid practicing licence shall be lead in any consultancy services involving Joint Venture (JV) relationships and agreements, relating to Law, Engineering, ICT, Architecture, Procurement, Quantity Surveying, and so on;
  3. MDAs shall ensure that all professionals practicing in Nigeria are duly registered with the appropriate regulatory bodies in Nigeria and shall ensure they collaborate with the Head of the Civil Service of the Federation, that all foreign professional certificates are valid and registered with the relevant professional bodies before being considered for any contract award or employment in Nigeria.

    NOTAP shall develop, maintain and regularly update an experts’ database. Such include expertise in science, engineering, technology and other fields. The Ministry of Interior shall take into consideration the NOTAP Data Base together with other similar data from the Nigerian Academy of Engineering; Nigerian Content Development and Monitoring Board; Federal Ministry of Science and Technology and other relevant Ministries; in determining the availability of local skilled manpower in Science, Technology and Innovation (STI) before the grant of Expatriate Quota.

  4. The Order goes further to set up the Presidential Monitoring and Evaluation Council (Council) headed by the President and comprising the Vice President, Ministers and Chairman of the Governor’s Forum amongst others to monitor the implementation of the Order.
  5. The President, pursuant to the authority vested in him by the constitution, ordered that all ”procuring authorities shall give preference to Nigerian companies and firms in the award of contracts, in line with the Public Procurement Act 2007.” The Executive Order also prohibits the Ministry of Interior from giving visas to foreign workers whose skills are readily available in Nigeria. However, the Executive Order notes that where expertise is lacking, procuring entities will give preference to foreign companies and firms with a demonstrable and verifiable plan for indigenous development, prior to the award of such contracts.

The Implementation of this Order is a welcome development and is bound to come with a number of implications on the economy of Nigeria. Some of them are:

It would promote the application of local content in science, technology and innovation within Nigeria.

It would encourage indigenous experts in diaspora to return to their home for public procurements purposes. This may result to improved standards and healthy competition in all sectors.

Preference would be given to Nigerian companies and firms by procuring authorities in the award of contracts.

Immigration agencies may create a special immigration class for experts in African countries to work and reside in Nigeria so as to share their knowledge with Nigerian experts. This will aid the capacity of the companies and foster inter-Africa relations.
Increased production of local materials for building and construction.

Ministries, Departments and Agencies, MDAs would begin to engage indigenous professionals in the planning, design and execution of national security projects.
This is a policy in the right direction and has laid a proper foundation for an industrial, diversified and self-sustaining economy. It is a step towards a sustainable path and to a future in which wholesale importation and consumption of foreign technology is reduced. With the passing into law of this Order, and the already existing provisions in the Companies and allied matters Act 1999, Nigerian Oil and Gas Industry Content Development Act of 2010 regulating the expatriate quota process, a key to its effectiveness and sustenance will be the need to properly monitor and execute the letter and spirit behind the Order.

Update on the Federal Government’s Palletization Policy

The Federal Government on the 1st December, 2017, directed that all containerized cargoes coming into Nigeria are to be on a pallet and this law came into effect on the 1st of January, 2018. Pallets are plane (flat) structures utilised in cargo container ships for supporting goods or containers.

This policy is an initiative of the Presidential committee on ease of doing business in Nigeria which stipulates that all containerized cargoes coming into Nigeria must be palletized. However, goods that have already been loaded for shipment into Nigeria prior to this date will not be affected by the palletization policy.

Also, several norms and measures have been established by the ISO (International Organisation for Standardisation) one of which is palletization. With this in mind, the government aims to bring the maritime industry up-to-date with the practises of ISO.

It is worthy of note that not all goods imported into Nigeria are to be palletized. Items exempted from palletization are categorized by:

Weight: Example includes heavy metals such as flat steel sheets, aluminum in coils and so on.
Mobility: Refers to commodities that can roll by itself such as motor vehicles, mobile gas cylinders, firefighting equipment and so on.

Container space: Having adequate space of at least 2ft between each cargo for ease of movement inside the container such as earth moving tyres and so on.

Fragility: Such as large, high precision diagnostic health machines.

It is imperative to note that palletization is not a novel concept in global trade. It is viewed best practice as it enhances efficient supply chain operations. Specifically, palletization facilitates easy handling by forklifts which results in improved timeline to store, load and unload goods which have been stacked on pallets. This concept will also assist officers of the Nigerian Customs Service in providing an easy and faster way to physically examine containers being brought into the country. From FGN’s standpoint, palletization would help accelerate operations at the ports, thus aiding the ease of doing business in Nigeria.

This article was contributed by George Etomi & Partners


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