Up to $5 billion will be ploughed back into the economy if the local content initiative of the federal government is diligently implemented.
This was revealed by the Vice President, Nigerian-American Chamber of Commerce (NACC), Ehi Braimah, when he spoke at the August Breakfast Meeting of the Chamber titled: The role of Nigeria’s local content policy and its impact on sustainable economic value creation.
He said there were synergies the local supply chains for human and material resources could benefit from the progress in the oil and gas industry, Information Communications Technology (ICT), maritime, agriculture, manufacturing, engineering, power, finance and insurance through skill transfer, collaborations, logistics, funding and strategic capabilities.
According to him, the country had already achieved a significant level of backward integration, in the cement sector with over 80 per cent of the materials for production sourced locally, adding that there have been several policies to promote backward integration in food processing.
He said the regulatory role of local content is to enable access to benefits of a country’s natural resources for economic development and distribute wealth generated to the larger populace.
The policy is also seen as a strategy to increase the participation of local firms in the value chain of various sectors; improve logistics and create more employment opportunities for the indigenous workforce. It is considered to be an important contribution to the extractive sector than its direct contribution to economic growth, he added.
“It must be stated that Nigeria has long experience of local content policy in the oil and gas sector with the establishment of the Nigerian Oil and Gas Industry Content Development Act in 2010.
“The Act, being enforced by the Nigerian Content Development and Monitoring Board, sets the minimum target for Nigerian participation in over 200 categories of oil services with the aim of fostering backward and forward linkages,” said Braimah.
According to him, the adoption of local content policy for the benefits of developing oil rich countries is hardly new but the continuous debate has often centred on increasing the value added that local content could create within the oil industry.
The level to which local policy can achieve this goal in some of these countries may not have been ascertained in Nigeria, the impact of local policy on local value creation has generated divergent speculations, he added.
He restated commitment of the chamber to the extension of the local content to other sectors of the economy.
Nigerian Content Development and Monitoring Board (NCDMB) Executive Secretary, Simbi Wabote, who was represented by the Director, Planning, Research and Statistics, of the board, Patrick Obah, said tremendous success was visible in the fabrication, training, vessels acquisition, manufacturing, pipe coating, among others, adding that topside integration of the Egina FPSO, the first in country is being witnessed.