UNDERSTANDING THE NIGERIAN LOCAL CONTENT DEVELOPMENT AND ENFORCEMENT BILL 2020

As approved by the Chairman House committee on Media and Public Affairs Rep. Benjamin O. Kalu (MHR) for a periodic enlightenment of the public on select Bills and Motions.

Bill Sponsors: Rep. Femi Gbajabiamila (APC, LAGOS), Rep. Legor Idagbo (PDP, CROSS RIVER) and others

Background
The concept of local content policy is to encourage local participation, ownership and control of certain key sectors by indigenous businesses. This 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 legislation in Nigeria is the 10-year old Nigerian Oil and Gas Industry Content Development Act 2010 (NOGICDA) which established the Nigerian Content Development and Monitoring Board (NCDMB) but is limited to the oil sector. Also notable, are the President’s efforts to extend local content compliance to the public procurement practices of federal parastatals vide his Executive Orders 003 and 005.

However, as we celebrate the Africa Day (May 25), a day 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 position which has forced countries to look inwards for economic growth and sustainability, it has become imperative to extend local content policy beyond the Petroleum Industry to other critical sectors like, ICT, Manufacturing, Agriculture, Power, Solid Minerals, Construction, Health etc through comprehensive legislation.

The Nigerian Local Content Development and Enforcement Bill 2020

The Nigerian Local Content Development and Enforcement Bill (the Bill) sponsored by Rep. Femi Gbajabiamila, Rep. Legor Idagbo and 7 other members of the House of Representatives 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.

Status of the Bill: Passed Second Reading

Key provisions and expected socio-economic benefits:
1.Promotion of local manufacturing and economic diversification with focus on ICT, Agriculture, solid minerals, hydrocarbon refining, power and manufacturing:
a.Provision for incentives to encourage local processing of hydrocarbon resources, export of processed mineral & agricultural commodities, local manufacturing of equipment, machinery, spares, chemicals, ICT hardware, development of software etc.
b.Provision for standardisation of locally made goods and locally sourced raw materials to make them competitive in the international market.

2.Preference for Nigerian made goods and services in all public procurements:
a. Nigerian content philosophy as a key requirement in all public sector procurements
b. Provision for the creation of local content departments in MDAs
c. 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
d. Nigerian content requirements in solicitation of bids
e. Requirement for Nigerian content compliance certificate as a pre-condition for contract awards
f. Creation of Nigerian content committee to develop economy wide local content policy.

3. Creation of a robust R&D ecosystem to drive home grown technology development:
a. Provision to promote collaboration between Research institutions, product developers and end users of Research
b. Provision to incentivize funding of research by public and private sector entities

4. Job creation drive to address unemployment:
a. First consideration for Nigerians with requisite skills in all public funded projects
b. Provision to create national data base of available skills
c. Requirements for approval and utilisation of expatriates to only roles where there is immediate skills shortage

5. Capacity building to develop resilient local supply chain:
a. Provision for targeted sector-specific capacity building programmes
b. Requirement to close capacity gaps in education, infrastructure, facilities and vendor development on the back of projects

6. Sustainable Funding for local content:
a. Provision to create a Nigerian Content Trust fund dedicated to implementing projects and programmes connected to developing local content
b. Application of the Fund to develop SMEs through low interest project -based financing schemes.

The enactment of the Nigerian Local Content Development and Enforcement Bill will strengthen executive-legislature synergy and oversight on local content administration in key sectors of the economy. It will also provide necessary legislative backbone for 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.

Rep. Benjamin O. Kalu
Chairman, House Committee on Media and Public Affairs

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