Senate Begins Amendment of Nigeria's Local Content Law

 

The Senate on Tuesday, commenced amendment of the Nigerian Oil and Gas Industry Content Development Act 2010.

This is following the consideration of a bill seeking to boost local content and strengthen the nation’s economy.   

According to a statement signed by

Ezrel Tabiowo, Special Assistant (Press)

to President of the Senate, The Nigerian Oil and Gas Industry Content Development Bill 2020, which scaled second reading on Tuesday, was sponsored by Senator Teslim Folarin (APC – Oyo Central). 

The lawmaker while leading debate on the bill, said the bill seeks to amend 38 Sections of the extant Act while introducing six new sections. 

According to Folarin, the essence of the bill is to bring the provisions of the sections to be amended into congruence with industry best practices. 

He recalled that the Nigerian Oil and Gas Industry Content Act which was passed in 2010 sought to among others, address the then abysmally low level of Nigerian content in the oil and gas sector of the economy; create a regulatory mechanism to monitor and enforce compliance by industry players; and to domesticate substantial part of oil and gas exploration and production activities within Nigeria. 

“You will recall that before this Act came into force in 2019, over ninety percent of the $20 billion spent yearly in the Nigerian oil and gas industry was repatriated abroad. 

"This was because a large chunk of the contracts were executed by foreign companies and in foreign facilities. With only few indigenous players and facilities participating in the contracting process in the industry, Nigerian content was less than five percent,” Folarin said. 

He however said with the enactment of the Act and the establishment of the Nigerian Content Development and Monitoring Board, Nigerians have also developed the capacity to carry out a lot of onshore upstream activities. 

“There has been a boost in the promotion of indigenous participation and the fostering of technological transfer as reflected in appreciable local growth. Only recently, one of Nigeria’s indigenous oil servicing firms established a 100 million fabrication plant in the Niger Delta region.

“The implementation of the Nigerian Content Fund by the Board has also facilitated the provision of capital and financial support to several indigenous companies,” the lawmaker said. 

The amendment to Section 11 captured in the new bill, according to Folarin, would give powers to the Minister of Petroleum to review the minimum target level for Nigerian content set in the schedule where the level is considered beyond the capacity of Nigerian companies by the board. 

Similarly, the amendment proposed to Section 33 of the Act would streamline and strengthen the process for obtaining expatriate quota to close the gap for current leakages and manipulation by foreign companies. 

Amendments to Sections 37, 38 and 39 in the bill are to improve the provisions relating to research and development and to ensure proper implementation, while Section 76 is proposed to give the Governing Council of the Board the role of Superintending over the conditions of service of employees of the board. 

Section 81 was also introduced to empower the Senate to screen and approve nomination of the Executive Secretary of  Nigeria Content Development and Monitoring Board (NCDMB) before confirmation. 

Contributing to the debate on the bill, Senator Olamilekan Solomon Adeola (APC – Lagos West) said, “this amendment is long overdue, and I want to believe it would stand. The Nigeria Oil and Gas Industry Content Bill should now be Nigeria Industry Content Development Act.”

“Now that we have succeeded in trying to see that local content has come to stay in the oil and gas sector, it is time for us to move to other line sectors which include manufacturing, ICT, construction and other sectors of the economy. 

“The main objective of this particular Act, is for two things: for Domestication and Domiciliation. That is the reason ab initio, the local content was set-up,” the lawmaker added.

The bill after scaling second reading was referred by the Senate President, Senator Ahmad Lawan, to the Committee on Local Content for further legislative work. 

The Committee which is Chaired by Senator Teslim Folarin was given four weeks to submit its report to the Senate.

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