A Review of the Nigerian Energy Industry

The Nigerian Content Act, unemployment & economic justice

Niger-Delta-Question06 February 2015, Sweetcrude, Port Harcourt – The development of and experimentation on regional political and economic blocs such as ECOWAS, the European Union, NAFTA, etc and the trend of globalisation, indicate that the concept is far from being acceptable by all. The adoption of the Euro by all EU countries except Britain has not in any way done more for Europe’s less privileged countries and EU migration continues to be a hot topic in election debates and European households. The moral of this conundrum is that within national boundaries, governments and people can fair better if they have predictable control of their resources.

The Nigerian government enacted the Local Content Act ostensibly to give more opportunities to Nigerians in the oil industry than they had been given. Even though Nigeria was coming late into the game (South African companies are by law obligated to advertise a job placement in the South African media and await local interest for 60 days before offering the job to a foreigner) the enactment of the Act was commended. However events and the business practices of Nigeria’s oil majors show a total disdain for the Act and its intendments. Nigerian companies have, in breach of the Local Content Act, engaged foreign companies to execute lucrative contracts that could have changed the unemployment statistics in Nigeria. The Joint Venture Partners and other oil companies have continued to award lucrative contracts that could have been executed in Nigeria to foreign elements that profit at the expense of young Nigerian school leavers.

Now, in so far as there is a Local Content Act with specific provisions that promote the award of contracts to Nigerian companies and that mandate companies to employ a minimum level of Nigerians at certain cadres, it would amount to economic injustice for companies to source contractors and workers externally. The Act provided for a Monitoring Board which has the duty of monitoring compliance with the Act but the duty falls on all Nigerians to monitor the performances of companies in their domains against the expectations of the Local Content Act. The Board is a government body constituted by government with all the implications of monitoring one’s own employer. Most JV companies are owned substantially by the federal government.

It is my humble opinion that the failure or success of the Nigerian Content Act would depend a lot on the attitude of those that suffered when it had not been implemented and those that stand to benefit from its provisions and its implementation.

John Iyene Owubokiri

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