A means to rectify the omissions
Undoubtedly, what gauges the achievement of content development in Nigeria and especially in the oil and gas industry, rests on the intricacy and aggregate of works done, and the contributions made by Nigerian domestic companies concerned with the development of infrastructure, technology and building galvanized human capacity in Nigeria, thereby assuring the reflow, retention and reinvestment of profits in our economy. Accordingly, these Companies are forming and expanding the required competence geared towards the ultimate exportation and transatlantic trading of Nigerian goods and services, in place of protracted dependence on importation, which typifies the precise features of Nigerian Indigenous Companies.
A brief study of some oil-producing countries shows how their Local Content Laws focus on the participation of their citizens in the oil and gas sector and have reflected the same in their laws. We can take a cue from our sister nation, Ghana, having passed a similar law three years after the enactment of the NOGICD Act. The Petroleum (Local Content and Local Participation) Regulation, 2013 (Ghana), passed in 2013, was enacted with the purpose of enhancing the capacity of indigenous Ghanaian companies and promoting their participation in the Oil and Gas Industry.
Regulation 49 of the country’s Petroleum (Local Content and Local Participation) Regulations, 2013 defines an “indigenous Ghanaian Company” as
A company incorporated under the Companies Act, 1963 (Act 179) that: a) has at least 51% of its equity owned by a citizen of Ghana; and b) has Ghanaian citizens holding at least 80% of executive and senior management positions and 100% of non-managerial and other positions.
Similarly, resource-rich countries; Kuwait, Qatar, Saudi Arabia and the United Arab Emirates (UAE) etc. also focus on local content requirements to maximize the gains of foreign participation in their Oil and Gas Sectors. The aim is to provide opportunities for local industries to participate in Oil and Gas activities. Although several of these countries do not exactly define the term “local” in their Local Content Regulation (LCR), generally it means; nationals, and companies owned, or majorly controlled by nationals.
It is owing to this prevailing reason, that Nigerian Indigenous Companies must assume a central place within the covers of our Local Content Act. Therefore, any amendment must be anchored on providing and encouraging an atmosphere for a flooding increase in their numbers and rapid growth in sizes, to redefine the Nigerian economy.
Oxford dictionary defines the term “indigenous” to mean “originating or occurring naturally in a particular place; native”. In line with the definition of the term indigenous, this work recommends that the term “indigenous” be retained and consequently, the interpretation Clause of the Bill should interpret “Nigerian Indigenous Companies” to mean;
A company with 100% equity and assets owned by Nigerian Citizens with its head office/parent company located in Nigeria.
It is only a clearly worded and purpose-driven definition of this kind that can adequately foster the existence of a truly Nigerian Indigenous Company, and guarantees an all-round local content development in our oil and gas sector.