A former Minister of State for Petroleum Resources, Odein Ajumogobia (SAN), has admonished members of the National Assembly not to scare investors away from Nigeria with stringent provisions in the proposed laws on local content policy in the country.
Ajumogobia who gave the warning on Thursday in Abuja during his paper presentation at the second-day of a virtual summit on local content organised by the Joint Senate and House of Representatives Committee on Local Content, said legislations for effective implementation of local content policy in Nigeria is very important but stringent provisions or conditions must be avoided in order not to scare investors away.
“Local content provisions in these Bills specifically require investors to meet certain targets, restrict them from certain areas of activities, issues of the type of investments they can make, partnership with local partners and so on, ownership of joint ventures, equipments they can and cannot supply and jobs created.
“Now if the target in the law are too high, then they may scare away investments or investors,” Ojumogobia said.
He, however, added that the laws should not be too weak either so as not to prevent the country from maximising their potentials.
“I am saying this to highlight the importance of framing the local content provisions in our laws. Targets and other local content objectives must be carefully quantified and adapted to local context and collaborative because local content is context specific.
“For example there is a provision that says a stipulated benchmark of 40% for subcontractors, which must be reviewed in terms of capacity,” he explained.
Picking holes in the proposed legislations, Ajumogobia asked: ” Would the draft bill do what it sets out to do, can it meet the objectives of those stipulated goals articulated in the bill enough to achieve what we seek and are they realistic. Could there be unintended consequences.
“This bill seeks to set up a local content legal framework for everything order than oil and gas.
“However as we all know, the oil and gas is very broad and there are companies that are not oil and gas in their orientation but provide services to oil and gas; catering would be an example.
“Now does the law take into account those overlaps in terms of activities in the industry for local content.
“Are there gaps or overlaps or conflicts without the laws? These are all areas that should concern us in ensuring that the new law is consistent with existing laws even though there is a provision for superiority”.
The summit coordinated by the Chairman, Senate Committee on Local Content, Senator Teslim Folarin (APC, Oyo Central), is preparatory to a public hearing that will later be organised on the Bills.
The ProjectorNews reports that the Bills under consideration are the Nigeria Oil and Gas Industry Content Development Act 2010 (Amendment) Bill, 2020 (SB.417), Nigerian Local Content Enforcement Bill, 2020 (SB. 419), and the Nigerian Oil and Gas Industry Content Act, 2020 (Repeal and Re-enactment) Bill 2020 (SB. 420).