IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 22 Apr 2010 | Removal date: open ended
Still in force

Local sourcing

On 22 April 2010, Nigeria adopted an act which provides for the development of Nigerian content in the Nigerian oil and gas industry: The Nigerian Oil & Gas Industry Content Development Act 2010, also known as the 'Local Content Act' or the 'Act'.
 
The new law seeks 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 employment of Nigerian staff in the industry.
 
The Local Content Act derives from the Nigerian Content Policy which seeks to promote active participation of Nigerians in the petroleum sector without compromising standards. The policy also focuses on the promotion of value addition in Nigeria through the utilization of local raw materials, products, and services in order to stimulate growth of indigenous capacity.
 
All regulatory authorities, operators, contractors, subcontractors, alliance partners and other entities involved in any project, operation, activity or transaction in the Nigerian oil and gas industry are required to consider Nigerian content as an important element of their projects. Nigerian independent operators shall be given priority in the award of oil blocks, oil field and oil lifting licenses as well as in all projects for which contracts are to be awarded in the Nigerian petroleum industry subject to the fulfilment of conditions specified by the Minister of Petroleum Resources.
 
The following provisions are stipulated in the act:

  • a Nigerian company is described as: 'a company formed and registered in Nigeria in accordance with the provisions of Companies and Allied Matters Act with not less than 51% equity shares by Nigerians'
  • permits are first and foremost granted to Nigerian companies
  • Nigerian companies receive a preferential margin in the bidding process
  • list with exact percentage of national content required for each service and product (see also Affected Tariff Lines)
  • establishment of Nigerian Content Development Fund (NCDF): government withholds 1% of contract sum in upstream oil and gas sector in order to secure financial future of the local industry 
  • tax reductions for companies establishing facilities in the country
  • keep bank accounts in Nigeria with at least 10% of revenue from Nigerian operations
  • employment of Nigerians-only in junior and middle-management positions
  • max. of 5% of management positions occupied by expatriates
  • ensure technology transfer to Nigerian companies
  • legal and insurance services only by Nigerians

 
Update
On 30 July 2014, the Federal Government was reported to free up $500 million for projects fostering the development of local content in the sector, such as include the pilot pipe mill being developed at Polaku, Bayelsa State, the NCDMB Headquarters building project in Yenagoa, the Oil and Gas Industrial Park development in Utuoke, also in Bayelsa State, artisanal training programme being organised by the NCDMB in conjunction with the Federal University Utuoke, and a host of other activities.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

152 Gypsum; anhydrite; limestone (flux) & other calcareous stone
2521 Limestone flux; limestone and other calcareous stone, of a kind used for the manufacture of lime or cement.
252100 Limestone flux; limestone and other calcareous stone, of a kind used for the manufacture of lime or cement.
373 Refractory products & structural non-refractory clay products
3816 Refractory cements, mortars, concretes and similar compositions, other than products of heading 38.01.
381600 Refractory cements, mortars, concretes and similar compositions, other than products of heading 38.01.
374 Plaster, lime & cement
2523 Portland cement, aluminous cement, slag cement, supersulphate cement and similar hydraulic cements, whether or not coloured or in the form of clinkers.
252310 Cement clinkers
252321 White cement, whether or not artificially coloured
252329 Other
252390 Other hydraulic cements
412 Products of iron or steel
7208 Flatrolled products of iron or nonalloy steel, of a width of 600 mm or more, hotrolled, not clad, plated or coated.
720825 Of a thickness of 4.75 mm or more
720827 Of a thickness of less than 3 mm
720837 Of a thickness of 4.75 mm or more but not exceeding 10 mm
720839 Of a thickness of less than 3 mm
720840 Not in coils, not further worked than hotrolled, with patterns in relief
720851 Of a thickness exceeding 10 mm
720852 Of a thickness of 4.75 mm or more but not exceeding 10 mm
720853 Of a thickness of 3 mm or more but less than 4.75 mm
720854 Of a thickness of less than 3 mm
720890 Other
7209 Flatrolled products of iron or nonalloy steel, of a width of 600 mm or more, coldrolled (coldreduced), not clad, plated or coated.
720917 Of a thickness of 0.5 mm or more but not exceeding 1 mm
720918 Of a thickness of less than 0.5 mm
720926 Of a thickness exceeding 1 mm but less than 3 mm
720927 Of a thickness of 0.5 mm or more but not exceeding 1 mm
720990 Other
7210 Flatrolled products of iron or nonalloy steel, of a width of 600 mm or more, clad, plated or coated.
721012 Of a thickness of less than 0.5 mm
721050 Plated or coated with chromium oxides or with chromium and chromium oxides
721061 Plated or coated with aluminiumzinc alloys
721070 Painted, varnished or coated with plastics
7304 Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel.
730411 Of stainless steel
730419 Other
730424 Other, of stainless steel
730429 Other
730431 Colddrawn or coldrolled (coldreduced)
730439 Other
730490 Other
7305 Other tubes and pipes (for example, welded, riveted or similarly closed), having circular crosssections, the external diameter of which exceeds 406.4 mm, of iron or steel.
730511 Longitudinally submerged arc welded
730519 Other
730520 Casing of a kind used in drilling for oil or gas
7306 Other tubes, pipes and hollow profiles (for example, open seam or welded, riveted or similarly closed), of iron or steel.
730611 Welded, of stainless steel
730619 Other
730630 Other, welded, of circular crosssection, of iron or nonalloy steel
730690 Other
429 Other fabricated metal products
7313 Barbed wire of iron or steel; twisted hoop or single flat wire, barbed or not, and loosely twisted double wire, of a kind used for fencing, of iron or steel.
731300 Barbed wire of iron or steel; twisted hoop or single flat wire, barbed or not, and loosely twisted double wire, of a kind used for fencing, of iron or steel.
7315 Chain and parts thereof, of iron or steel.
731581 Studlink
731589 Other
731590 Other parts
8205 Hand tools (including glaziers' diamonds), not elsewhere specified or included; blow lamps; vices, clamps and the like, other than accessories for and parts of, machine tools; anvils; portable forges; hand or pedaloperated grinding wheels with frameworks
820510 Drilling, threading or tapping tools
820520 Hammers and sledge hammers
820540 Screwdrivers
820551 Household tools
820559 Other
820590 Other, including sets of articles of two or more of subheadings of this heading
8207 Interchangeable tools for hand tools, whether or not power operated, or for machinetools (for example, for pressing, stamping, punching, tapping, threading, drilling, boring, broaching, milling, turning or screw driving), including dies for drawing or e
820713 With working part of cermets
820719 Other, including parts
820740 Tools for tapping or threading
820750 Tools for drilling, other than for rock drilling
820770 Tools for milling
820790 Other interchangeable tools
432 Pumps, compressors, hydraulic & pneumatic power engines; parts
8481 Taps, cocks, valves and similar appliances for pipes, boiler shells, tanks, vats or the like, including pressurereducing valves and thermostatically controlled valves.
848110 Pressurereducing valves
848130 Check (nonreturn) valves
848140 Safety or relief valves
848180 Other appliances
848190 Parts
433 Bearings, gears, gearing & driving elements; parts
7315 Chain and parts thereof, of iron or steel.
731511 Roller chain
731512 Other chain
731519 Parts
435 Lifting & handling equipment & parts
8431 Parts suitable for use solely or principally with the machinery of headings 84.25 to 84.30.
843110 Of machinery of heading 84.25
843120 Of machinery of heading 84.27
843139 Other
439 Other general-purpose machinery & parts
8418 Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps other than air conditioning machines of heading 84.15.
841850 Other furniture (chests, cabinets, display counters, showcases and the like) for storage and display, incorporating refrigerating or freezing equipment
841869 Other
841891 Furniture designed to receive refrigerating or freezing equipment
841899 Other
8419 Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 85.14), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting
841950 Heat exchange units
841960 Machinery for liquefying air or other gases
841989 Other
841990 Parts
442 Machine-tools & parts
8459 Machinetools (including waytype unit head machines) for drilling, boring, milling, threading or tapping by removing metal, other than lathes (including turning centres) of heading 84.58.
845929 Other
8465 Machinetools (including machines for nailing, stapling, glueing or otherwise assembling) for working wood, cork, bone, hard rubber, hard plastics or similar hard materials.
846592 Planing, milling or moulding (by cutting) machines
846595 Drilling or morticing machines
444 Machinery for mining, quarrying & construction; parts
8430 Other moving, grading, levelling, scraping, excavating, tamping, compacting, extracting or boring machinery, for earth, minerals or ores; piledrivers and pileextractors; snowploughs and snow blowers.
843039 Other
843041 Selfpropelled
843049 Other
8431 Parts suitable for use solely or principally with the machinery of headings 84.25 to 84.30.
843143 Parts for boring or sinking machinery of subheading 8430.41 or 8430.49
843149 Other
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter.
847910 Machinery for public works, building or the like
445 Machinery for food, beverage & tobacco processing; parts
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter.
847920 Machinery for the extraction or preparation of animal or fixed vegetable fats or oils
448 Domestic appliances & parts
8418 Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps other than air conditioning machines of heading 84.15.
841810 Combined refrigeratorfreezers, fitted with separate external doors
841821 Compressiontype
841829 Other
841830 Freezers of the chest type, not exceeding 800 l capacity
8419 Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 85.14), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting
841911 Instantaneous gas water heaters
449 Other special-purpose machinery & parts
8419 Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 85.14), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting
841939 Other
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this Chapter.
847960 Evaporative air coolers
847981 For treating metal, including electric wire coilwinders
847982 Mixing, kneading, crushing, grinding, screening, sifting, homogenising, emulsifying or stirring machines
847989 Other
847990 Parts
452 Computing machinery & parts
8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included.
847130 Portable automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard and a display
847141 Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined
847149 Other, presented in the form of systems
847150 Processing units other than those of subheading 8471.41 or 8471.49, whether or not containing in the same housing one or two of the following types of unit : storage units, input units, output units
847160 Input or output units, whether or not containing storage units in the same housing
847170 Storage units
847180 Other units of automatic data processing machines
847190 Other
463 Insulated wire & cable; optical fibre cables
8544 Insulated (including enamelled or anodised) wire, cable (including coaxial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with
854411 Of copper
854419 Other
854420 Coaxial cable and other coaxial electric conductors
854442 Fitted with connectors
854449 Other
854460 Other electric conductors, for a voltage exceeding 1,000 V
854470 Optical fibre cables
491 Motor vehicles, trailers & semi-trailers; parts
8705 Special purpose motor vehicles, other than those principally designed for the transport of persons or goods (for example, breakdown lorries, crane lorries, fire fighting vehicles, concrete mixer lorries, road sweeper lorries, spraying lorries, mobile wor
870510 Crane lorries
870530 Fire fighting vehicles
870540 Concretemixer lorries
870590 Other
493 Ships
8905 Lightvessels, firefloats, dredgers, floating cranes and other vessels the navigability of which is subsidiary to their main function; floating docks; floating or submersible drilling or production platforms.
890510 Dredgers
890590 Other
8907 Other floating structures (for example, rafts, tanks, coffer dams, landingstages, buoys and beacons).
890790 Other

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