Local Content Policy, Human Capital Development and Sustainable Business Performance in the Nigerian Oil and Gas Industry

Abstract

This study examined the extent to which the Local Content Policy has impacted on human capital development and sustainable business performance in the Nigerian Oil and GasIndustry, following the enactment of enabling legislation. Primary data were employed, which were obtained through the administration of structured questionnaire to purposively selected oil servicing companies in Niger Delta, the home to more than eighty percent of the indigenous oil companies in Nigeria. The results showed that Local Content Policy had significant impact on the development of human capital in the Oil and Gas Industry. There was a paradigm shift in the educational capacity of the Management of the oil servicing firms as over 70% of them had at least first degree or its equivalent. Through oil sector linkages, the firms had strengthened their absorptive capacities to internalize the technological and managerial skills that flow to them. This had consequently boosted the business performance of indigenous oil servicing firmsin terms of growth in profit, market share and returned on investment (ROI). The study concluded that the Local Content Policy had achieved significant success in enhancing the development of human capital which in turn positively influenced business performance of indigenous companies in the Oil and Gas Industry in Nigeria.