Impetus and Impediments in the Nigerian Content Law: A Sabbatical Review

Abstract

AbstractThe theoretical bases for the body of policies for the development and utilisation of local capacities in general or in specific industries – now generally referred to as ‘local content’ policies – are of long standing. Evidence of their existence has long been scattered in white papers and the statute books of developing countries. From international trade perspective, it partakes of the protectionism-competitiveness debate regarding the mediation of imported capital vis-a-vis domestic capital formation. That debate itself, however, begs the question as it presupposes the existence of a fairly formed local industry worth protecting. From the standpoint of the global value chain, a local content policy aims to help countries that traditionally occupy the head-end of inbound logistics in global industries gain on a longer stretch of the chain. Furthermore, from the perspective of industrial policy, it provides an option by which developing countries grow local participation in strategic industries – this time, through the empowerment of local enterprises rather than the agency of state holdings as in traditional in industrial policies. Prior to 2010, legislations in Nigeria are strewn with provisions that promote the systematic acquisition of technological and management skills, regulate the utilisation of expatriate workforce as well as prefer if not entirely preserve local participation in certain categories of businesses and professions. In recognition of the central role of oil and gas in the Nigerian economy, Nigerian Oil and Gas Industry Content Development Act (‘Nigerian Content Act’) was passed in 2010. Seven years after that landmark event, this paper reviews the virtual framework created by the pre-existing laws and highlight the novelty of the Nigerian Content Act and its proposed amendment. It concludes that, whilst many of the provisions of the Nigerian Content Act brought about a number of improvements to the subject matter, some others have potentials to tame the effectiveness of pre-existing laws. Since some of the confusions introduced by the latter category of provisions are largely due to poor draftsmanship, the paper also identifies some key provisions that could benefit from a second take by the draftsman.