ANNOUNCEMENT 22 Apr 2010

In April 2010, the government of Nigeria announced a changed incentive to localise business operations.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



Nigerian Oil and Gas Content Development Bill 2010. Available at http://www.nape.org.ng/images/stories/Nigerian%20Content%20Development%20Bill%202010.pdf

Onuah, F. 2010. 'Nigeria's acting leader signs local content oil bill.' Reuters Africa. 23 April. http://af.reuters.com/article/topNews/idAFJOE63M03V20100423?pageNumber=1&virtualBrandChannel=0

Odujinrin & Adefulu. (2010). An Overview Of The Nigerian Oil And Gas Industry Content Development Act 2010. Available at http://www.mondaq.com/article.asp?articleid=99294


Inception date: 22 Apr 2010 | Removal date: open ended
Still in force

Localisation incentive

The Nigerian Oil and Gas Industry Content Development Bill (2010) has been signed into law by the acting president Goodluck Jonathan. The law gives preference to local companies in the oil industry in Nigeria and seeks to encourage local employment.
 
The new law sets comprehensive and detailed discriminatory requirements for projects in the oil and gas industry. Not only are services and equipment used for the exploration natural resources subjects to the new rules. Also, auxilliary services such as financing and insurance are affected by the new law. The following list seeks to enumerate the core aspects of the bill:
 

  • Submission of Nigerian Content Plan. When bidding for a licence, companies have to submit a plan specifying the utilization of Nigerian goods and services in the prospective project. Also, companies will have to provide details on how they will train and develop Nigerian staff.
  • Compliance with mandatory amounts of Nigerian content. In the schedule attached to the Bill, the Nigerian government enumerates. Nigerian content requirements for both products and services. Companies operating in oil and gas industry will have to prove their compliance to the given rules.
  • Nigerian content as an evaluation criteria in official tenders. In case further bids lie within 1 percent of the best bid, the bid withholding a significantly higher share of local content shall be awarded the contract.
  • Preferential price margin for domestic bidders. Bids from Nigerian companies are granted a 10 percent price margin against the lowest foreign competitor.
  • Employment and development of Nigerian staff. Nigerians shall be given first priority in employment as well as training.
  • Quotas for foreign workers. Foreign personal may only account for 5 percent of the management staff for a given project.