Senate: Bill to repeal Oil and Gas Industry Content Act (2010) passes second reading

By Haruna Salami

A Bill for an Act to repeal the Nigerian Oil and Gas Industry Content Act (2010) and to enact the Nigerian Local Content Development and Enforcement Commission Act (SB. 420), on Wednesday, passed second reading in the Senate.

The Bill was sponsored by Sen. Sabi Abdullahi (Niger North) and co-sponsorsed by Senators James Manager, (Delta South), Tanko Al-Makura,. (Nasarawa South) and Suleiman Kwari (Kaduna North).

It was read for the first time on Tuesday, 12th May, 2020.

Leading the debate on the Bill, Sabi said “the Bill was developed to promote some very key principles of organization, execution, results-based performance and overall targeted development of critical sectors of the Nigerian economy such as oil and gas, health, construction, manufacturing, ICT, solid minerals and metallurgy and power; while providing room for all other sectors through the provision for setting up of Nigerian Local Content Development Units in the line sectoral ministries.”

On the argument that Oil and Gas sector should be left out of the comprehensive local content development package, Sabi said that cannot be in the “national interest”.

“To accede to that argument is to admit that incremental growth and development is not required for our economy.

“It is also an invitation that create room for inter agencies conflicts (with two separate bodies for the same subject matter) which would be counterproductive to our local content development efforts,” he said.

Sabi disclosed that strategic and deliberate measures were put in place in the Bill, to ensure that the gains recorded for local content in the oil and gas industry, are retained, maintained and shielded from poaching and distortion in any form and guise. 

“Indeed, Directorates for the key sectors like oil and gas, solid minerals and metallurgy, ICT, health, construction, power and manufacturing are independent in their operations while maintaining policy synergy and complementarities through the very high -level board of the Commission to be Chaired by the Vice President of the Federal Republic of Nigeria” as contained in clauses 16 and 17 of the Bill. 

“Indeed, Local content has immense potential to transform the Nigerian economy by creating jobs and substituting the importation of goods and services with in-country manufacturing, Nigerian content can allow the country to cure the so-called ‘resource curse’ and transition to a resource -led development while accelerating structural transformation of the Nigerian economy

“Experts have posited that the combine effect of the new local content intervention can contribute over 20 million direct, indirect and induced jobs into the Nigerian economy through the proper execution of the provisions of this Bill in the Oil and Gas, ICT, Power, Manufacturing, Construction, Solid Minerals and Metallurgy, Power and health sectors of the Nigerian economy. 

“There will also be massive industrialization occasioned by the expected skills development in the various sectors due to an affirmative policy action that guarantees infrastructure development, local firms’ participation, backward linkages and job creation. This is what the Special Credit Guarantee Scheme is to achieve for the Country under this Bill. 

“It should be noted that Chinese businesses come into this Country with equipment supplied to them almost on interest free rate to exploit our natural resources while our citizens fall out of competition as a result of lack of funds to upgrade their production activities. Where there is even fund, the interest rate and the collateral required by the financial institutions are so demanding making it nearly impossible to meet up with the demands of raising a loan for production activities from our financial institutions”, Sabi said.

The Bill, which received overwhelming support from senators, was read for the second time and referred to the committee on Local Content for further legislative work and public hearing.