Promotion of linkage development is essential to enhance the contribution of the oil and gas industry to the macro economy. Local content regulation as a differentiator for inward investment in africa. Local content in nigeria the guardian nigeria news. The shell nigeria exploration and production company snepco, says its local content strategy was built around the national framework as developed by the nigeria content development and monitoring board. Ncdmb and the implementation of the ncdf 1% tax local. Countries can encourage local content through requirements and targets written in national laws. Countries that adopt local content as a development strategy for their extractive sectors usually start by developing local content frameworks policies and laws. Local content meaning in the cambridge english dictionary. The nigerian oil and gas content development act of 2010 has provisions to. The nigerian oil and gas industry has developed, focusing on increasing indigenous participation in the industry. In the middle east and north africa, where shell livewire is called intilaaqah, we trained 1,920 participants in 2017 52% of whom were women.
Pdf the nigerian state has been faced with various economic, social, political, educational, and development problems in all sectors of the nigerian. First, instruments are designed to encourage sourcing of. While a welldesigned local content framework is a valuable starting point, there are other factors that can shape their successful implementation aoun and mathieu 2015. Strengthening the capacity of the economic community of central african states to.
Drive impacts to host community level nigeria oil and gas industrial parks scheme. Petroleum local content and local participation regulations, 20 in exercise of the power conferred on the minister responsible for energy by section 22 of the petroleum commission act, 2011 act 821, these regulations are made this 5th day of july, 20. Measures to stimulate the use of local content in the extractive sector can be grouped into three main categories. The enactment of the nigerian oil and gas industry development act in april, 2010 was greeted with much fanfare within the circles of nigerian businesses and professionals plying their trade in the nigerian oil and gas industry. One of the first steps in this charge is to develop robust real local content local content referring to homegrown labour, services and resources, all things that nigeria has in swathes but. Nigeria has long experience of local content policy in the oil and gas sector. The nigerian oil and gas industry content development act. Implementation of local content in nigeria in a related development, the senate of the na, in september 2016, mandated its committee on petroleum upstream and gas to conduct a public hearing to investigate the implementation of local content in nigeria, with a view to determining the degree of compliance with the nogicda by industry operators. Nigeria that are rich in natural resources but whose oil and gas sector has traditionally operated in isolation. Why local content in africas extractive sector wont work. First, instruments are designed to encourage sourcing of local inputs, with a view to promote upstream linkages.
Overview of the nigerian oil and gas industry content. In nigeria, researchers assessed the enabling environment for private sector. Local content development is critical for countries like nigeria that are rich in natural resources but whose oil and gas sector has traditionally operated in isolation from the rest of the economy, thereby allowing minimal participation from local citizens in its development. Linkage development can facilitate technology transfer and economic diversification. Local content in oil, gas, and mining world bank group. Link oil and gas sector to other sectors of the economy.
The extractives for local content development community of practice. An overview of the nigerian oil and gas industry local. The nigerian oil and gas industry content development act the act is designed to enhance the level of participation of nigerians and nigerian companies in the countrys oil and gas industry. The shell nigeria exploration and production company snepco, says its local content strategy was built around the national framework as developed by the. Nigerias story of local content interventions in the oil industry. Presented at a regional workshop and project launching on ameliorating the structural effects of mineral resources in the economic. The nigerian oil and gas industry content development act 2010 was therefore signed into law on april 22 nd 2010 and aims to increase indigenous participation in the oil and gas industry by prescribing minimum thresholds for the use of local services and materials and to promote the transfer of technology and skill to nigerian labour in the. The case of sierra leone summary 3 pages a changed context for local content with the current downturn in the global markets for oil, gas and minerals, and slower global growth more generally, the role of local content regulation needs to be rethought. The current climate of the industry has largely been influenced by the. The bill received presidential assent on 22 april 2010 and created a law to provide for the development of indigenous content in the nigerian oil and gas. This c4dbased online collaboration platform connects policy makers, companies, academics and practitioners, to share and create knowledge around local content development in the extractive industries. Shell explains its local content strategy for nigeria. Funding implementing modalities to extend the nigerian content intervention fund to selected targeted stakeholder groups, and research and development.
The targets for lc policy in increasing local content development were set progressively. In addition, local content and other policies designed to increase incountry value have a dual nature ovadia 2012. Through nigerian content, nigeria may finally be able to make its oil wealth a blessing instead of a curse. Local content development is critical for countries like. Stimulating direct local employment executive summary when a mining company arrives in an area, the promise of local employment is central to public debate in leastdeveloped, developing and developed countries alike. This is geared to developing and improving local capacity and participation in the extractive industry and the overall improvement of the economy. The profiles are intended as a tool for policy makers, researchers and citizens seeking to understand and compare how local content is dealt with in other countries, and to provide some examples of language that might be adopted in a framework to achieve local content goals. Local content is the value that an extraction project brings to the local, regional or national economy beyond the resource revenues. Conceptualizing tvet in most advance economies, industrialization most certainly emanate from tvet kutz, 2001. Unctad commissioned an overview of local content regulatory frameworks in selected eccas countries in the oil, gas and mining sector as part of united nations development account project 1415p. Cited in o uchenna, towards sustainable local content development in the nigerian oil and gas.
The execution of these initiatives will go a long way towards the attainment of the objectives of the boards 10year strategic roadmap, one of which is to achieve 70% local content by 2027. Foster measurement and implementation of local content. Oil and gas news in africa local content development. Local content policy in nigeria started in 1971 through the establishment of the national oil company noc to promote the indigenisation policy in the oil and gas sector. The board shall implement the provisions of the bill with a view to ensuring a measurable and continuous growth in nigeria content. Nigeria has been working to implement local content through a newly created agency, the nigerian content development and monitoring board ncdmb. The role of local content policy in local value creation. A serious attempt was, however, made in 2010 with the promulgation of the nigerian oil and gas development. A nigeria content development and monitoring board the board has been established and vested with the responsibility to implement the provisions of the act, make procedural guidelines and monitor compliance by operators within the oil industry. The nigerian local content development policy local content policy in nigeria started in 1971 through the establishment of the national oil company noc to promote the indigenisation policy in the oil and gas sector. Recent experiences suggest that especially in newly designed local content policies, there is space for improvements in order to be effective. The local content act defines local content as the quantum of composite value added to or created in nigeria through utilization of nigerian resources and services in the petroleum industry resulting in the development of indigenous capability without compromising quality, health, safety and environmental standards. Many nigerians directly or indirectly linked with the oil industry all let of a sigh of relief as the new law was widely expected to create more opportunities for. Guidelines for nigerian content development in information.
Best practice for local content development strategy. Nigerian content development fund the atact estblihtablishes a ni inigerian cttcontent dl tdevelopment fdfund managed by the board and funded through a 1% deduction at source of every contract awarded to any operator, contract, subcontractor, alliance partner or any other entity in any ppjroject. Local governments, at least in principle, deal with grassroots politics, i. Engie africa has announced the successful acceleration of the access to energy a2e strategy that it launched in 2018, thereby establishing its position as market leader on the continent. The role of local content policy in local value creation in. This is reflected through the nigerian government initiative of increasing local content and ensuring that indigenous companies have a greater part in developing oil and gas assets. Nigerian oil and gas industry content development act, 2010. The nigerian oil and gas industry content development act 2010 lists targets for progressive increases in local content. Local content development in the nigerian oil and gas industry local content development is critical for countries like nigeria that are rich in natural resources but whose oil and gas sector has traditionally operated in isolation from the rest of the economy, thereby allowing minimal participation from local citizens in its development. The passage into law of the nigerian local content bill is one of the significant developments for domesticating the oil and gas industry through local value additions to the local economy. Integrate oil producing communities into the oil and gas value chain. Resourcerich countries are increasingly inserting requirements for local content local content provisions into their legal framework, through legislation, regulations, contracts, and. Thus, the focus of this paper is to briefly explain the local content act and its implication on tvet and the nigerian economy. Nigerian content monitoring board the act establishes the nigerian content monitoring board the bdboard whi hhich is theregultlatory agency vestdted with the responsibility of regulating local content.
Tied to national agenda chairman governing council is member of fec and direct report to. Local content development newsroom seplat petroleum. March 2017 recent developments on nigerian content law in the. An important consideration is the journey local content development has taken in the context of the ogm sector in theory and practice. The nigerian state has been faced with various economic, social, political, educational, and development problems in all sectors of the nigerian economy. Training and employment connects the local communities. Local content broadcast in nigeria is meant to be a means through which the mass society experience culture. Overview of local content regulatory frameworks in. Local content ng is designed to aid you better understand and utilize your untapped benefits from local content development in nigeria. Every nigerian citizen young or old possesses a unique potential, this can only be better used depending on the awareness of opportunities.
Local content development in the nigerian oil and gas. Local content policy, human capital development and sustainable business performance in the nigerian oil and gas industry james unam monday1 1 department of management and accounting, obafemi. What matters when it comes to adopting local content. Development policies and programmes university of calabar press. Pdf a novel concept, local content, in oil industry is gradually emerging.
A paper commissioned by revenue watch institute social funds in peru, korpela, 2009, makes. Local content development in the nigerian oil and gas industry. For local communities, decent mining company jobs that are safe, stable and fairly compensated. Noc became nigerian national petroleum corporation nnpc in 1977. The policy is designed to build the capacity of indigenous firms and to provide more opportunities for participation in business. Pdf towards sustainable local content development in the. Maximize participation of nigerians in oil and gas activities. Nigerian content or local content is the equivalent of local value added to the development, design, fabrication and assembling of ict products in nigeria measured in monetary terms as a proportion of production cost or the proportion of indigenous manpower involved in the various stages associated. Local content policies offer exciting new potential for economic development in nigeria by encouraging economic activity, value addition, and job creation. March 2017 recent developments on nigerian content law in. Inspite of the huge financial investment made by the nigerian government in the oil and gas industry of. Petroleum exploration, development and production local content regulations, 2014.
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