Thanks to the Nigerian Oil and Gas Industry Content Development Act (Local Content Law) local content is increasingly becoming a part of the day to day lexicon of professionals in Nigeria. The Local Content Law gives preferred status and, in some cases, exclusive status to Nigerians and Nigerian controlled companies in the grant of contracts, the use of material and human resource in the Nigerian oil and gas industry. It also makes it compulsory to utilize the Nigerian service industry. Our view is that the Act has achieved modest success in increasing the number of local players in the the oil and gas value chain from the downstream to the upstream sector. Compliance with the Act is certainly viewed as a prerequisite to doing business by IOCs and other oil companies. The effects of this has been consequential. Of all the recent divestments by IOCs, Nigerian content in its equity holding played a significant role.Other industries are taking cue. There is currently a Nigerian content bill for the construction industry before the National Assembly and the Nigeria Electricity Regulatory Commission (NERC) has recently said that it would release local content regulations for the power sector in February. These regulations will, among other things, "localize both technology and services". This, we assume, will mean requiring companies to manufacture equipment in Nigeria and to hire Nigerian staff.
It certainly appears as though the modest gains so far are an indication success of the local content policy drive ... time will tell though.
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