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Promoting Good Governance.

Three major sectors to benefit from amended Local Content bill as it passes second reading

THE Senate on Wednesday has referred the bill for an Act to repeal the Nigerian Oil and Gas Industry Content Act, NOGIC, Act 2010, to the Senate’s Committee on Local content for review after it passed the second reading.

Aliyu Sabi, a senator from Niger State who is at the forefront seeking to repeal the NOGIC Act, 2010, in replacement for Nigerian Local Content Development and Enforcement Commission Act, NCDE said the bill would realise the legislative agenda of the ninth assembly.

The bill had 209 clauses which would address all the local content needs for the oil and gas industry and also extend to other sectors of the economy, he said.

https://twitter.com/NGRSenate/status/1270700026851926017?s=20

The NCDE bill seeks to update and replace the outdated provisions of the Nigerian Oil and Gas Industry Content Act, NOGIC, Act 2010, to ensure that priority is given to Nigerian operators in the issuance of licences and permits in designated sectors especially oil and gas sector.

It also stipulates that companies or individuals undertaking a business activity in the Nigerian economy shall give consideration in terms of the award of contracts and employment to Nigerian indigenous businesses and individuals.

Kabiru Gaya, representing Kano South senatorial district said the bill was long overdue stating the current bill should be merged with any other existing one to align a wholistic standard local content.

After deliberations on the bill, Ahmad Lawan, President of the Senate asked that the committee on Local Content should report to the Senate in four weeks

These are three major sectors that the NCDE bill is set to benefit Nigerian workers and indigenous service companies in the country if it is passed.

Oil and Gas

The bill proposes that Nigerian independent operators should be given first consideration in the award of oil blocks, oil field licences, oil lifting licences as well as contracts for projects subject to the fulfilment of conditions as specified by the Minister of Petroleum Resources.

A major challenge in the oil and gas sector is its technology intensiveness but the bill makes provision for Nigerians working with foreign oil and gas firms to build core competencies and acquire skills by ensuring minimal deployment of foreign expertise in project execution.

While contracts involving a total budget exceeding $1 million held by a foreign firm shall have a labour clause mandating the use of a minimum percentage of Nigerian labour in specific cadres as may be stipulated by the Board.

It also compels foreign operators in the sector to submit to the Board a succession plan for positions not held by Nigerians to enable nationals understudy positions held by incumbent expatriates for a maximum period of five years after which such positions will be held by Nigerians.

Power Sector

One of the key targets of the Nigerian content policy under the NCDE bill in the power sector is to ensure Nigerian firms are given exclusive consideration in the issuance of licences, permits, leases and other instruments vesting right of operation if they have demonstrated sufficient capacity.

The bill states that baring uncertain circumstances where there are inadequate local materials or the inability for any contract to be engaged, the board may grant its permission for a waiver so a foreign company to step in but not more than 3 years from the date of the approval.

However, the bill imposes on every unit of power purchased by an electricity consumer a two per cent charge of the monetary value of the unit purchased which will be paid into a Fund that would be named “National Power Development Fund” which shall be administered by the board alongside the Nigerian Electricity Regulatory Commission (NERC) to promote Nigerian Content in the Power Sector.

Information and Communication Technology (ICT)

The bill also seeks to establish a National Office for Nigerian Content on Information And Communication Technology (“the National Office on ICT”) which shall be responsible for implementing the local content obligations of the ICT sector.

With exclusive consideration to be given to Nigerian indigenous companies that demonstrate the requisite capacity, with regards to the grant of a licence, leases, permits, and other right-vesting instruments in relation to the ICT sector.

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