Oil and Gas Industry and the Growth of Small and Medium Enterprises in Nigeria: Local Content Policy Implications

Abstract

The objective of this study, oil and gas industry and the growth of small and medium enterprises in Nigeria: local content policy implications is to evaluate the Impact of Local Content policy on the size of small and medium oil industries in Nigeria. The population of the study was all the 945 workers in Elf Petroleum (Total) and Mobil (ExxonMobil) oil companies operating in Nigeria, using simple random sampling technique by balloting. The sample size of the study was 567 workers in the two companies representing 60% of the population out of which 450 were validly satisfied. Data were analyzed using descriptive statistics using mean, mean set and standard deviations while The Z-test was used to analyze the hypotheses. The findings showed that the Local Content Policy influences greatly on the size of Small and Medium oil industries in Nigeria. It was also discovered that tedious pre-qualification and tender processes, inadequate financing and poaching of Staff by the bigger oil companies are constraints on the efficacy of Local Content Policy in Nigeria. The paper therefore recommends that there should be an enactment of the Local Content Act. It also recommended that closer supervision and monitoring of the policy guidelines by regulatory authorities should more active. Reduction of registration fees with regulatory authorities such as DPR and NAPIMS should be streamline. There should be support for SMEs operating in the industry in terms of single-digit financing for projects. Finally, government should facilitate the quality partnerships and alliances that car enhance higher levels of technology transfer and capacity building.