The Nigerian Local Content Policy and Its Impact on Sustainable Economic Value Creation

Abstract

The question of how adopting local content policy (LC policy) benefits the economic growth of developing oil-rich countries is not new. It is a continuous debate that often centers on increasing the value-added that LC policy can create within the oil industry. In Nigeria, the impact of LC policy in local value creation has generated divergent views. The high cost of funds is a factor that jeopardizes the indigenous oil service companies’ ability to compete effectively with their foreign counterparts who are well endowed with capital. Policy makers in the Nigerian oil and gas industry must seriously consider the idea of establishing a strong energy bank that would empower local contractors/investors. This would increase their level of participation and give them the necessary experience that would engender technology transfer. Technology transfer should be well programmed and aggressively pursued if economic, military and political advantages are to be guaranteed. Nigeria, therefore, needs her own unique strategy of technological progress pursued with all seriousness if Nigerians are to make any meaningful impact soon. The newly created Nigerian Content Development and Monitoring Board, NCDMB, (charged with the responsibility of strictly enforcing compliance) must work assiduously for the success of the local content policy.