Con­tent de­vel­op­ment: Panacea for so­cio-eco­nomic prob­lems

Daily Trust - - OPINION - By S.I. So­dangi

The Nige­rian Oil and Gas In­dus­try Con­tent De­vel­op­ment Act is the end re­sult of many decades of at­tempts by the gov­ern­ment and other stake­hold­ers in the petroleum in­dus­try to en­sure that the in­dus­try pro­vides lo­cal value and max­i­mum ben­e­fits to Nige­ri­ans. In over fifty years since the dis­cov­ery of oil in Nige­ria, the petroleum in­dus­try has func­tioned as an “en­clave” econ­omy, with very few, if any, link­ages and very lit­tle con­tri­bu­tion to the wider Nige­rian econ­omy.

Ear­lier steps taken to en­sure that the lo­cal con­tent pol­icy be­comes a re­al­ity in­cludes the es­tab­lish­ment of re­search, de­vel­op­ment, train­ing, ed­u­ca­tion and sup­port funds. Pro­vi­sions in the Petroleum Act on manda­tory em­ploy­ment and train­ing of Nige­ri­ans by the petroleum op­er­a­tors, pro­vi­sions on tech­nol­ogy trans­fer, lo­cal con­tent util­i­sa­tion, re­cruit­ment and train­ing of Nige­rian em­ploy­ees con­tained in the var­i­ous con­trac­tual ar­range­ments with the In­ter­na­tional Oil Com­pa­nies (IOCs) and the es­tab­lish­ment of the Nige­rian Con­tent De­vel­op­ment Divi­sion (NCD) in the NNPC to mon­i­tor and give ef­fect to gov­ern­ment’s Nige­rian Con­tent Pol­icy.

The scope of this Act in­cludes all ac­tiv­i­ties car­ried out in the oil and gas in­dus­try de­fined in the Act as all ac­tiv­i­ties con­nected with the ex­plo­ration, de­vel­op­ment, ex­ploita­tion, trans­porta­tion and sale of Nige­ria’s oil and gas re­sources in­clud­ing but not lim­ited to up­stream and down­stream oil and gas op­er­a­tions.

In the process of im­ple­ment­ing the pol­icy, it be­comes nec­es­sary not only to con­tin­u­ously im­prove the engi­neer­ing knowl­edge and ex­per­tise but also to de­velop the work­shops such as foundries, forge shops, fab­ri­ca­tion shops, ma­chine shops, etc. to pro­duce the plants and equip­ment re­quired as well the spare parts needed to fos­ter and sus­tain the main­te­nance cul­ture that is uni­ver­sally lack­ing in our so­ci­ety as at now.

The NCD Pol­icy was first con­ceived in the early 1970s when it was called Lo­cal Con­tent De­vel­op­ment (LCD) at the time the six or so ve­hi­cle assem­bly plants were set up as fol­lows: Peu­geot at Kaduna, Volk­swa­gen in Lagos, Mercedes in Onit­sha, Ley­land in Ibadan, Steyr at Bauchi and Fiat at Kano.

The pol­icy ob­jec­tive was to at­tain 80% lo­cal con­tent for each of these ve­hi­cles within 10 years of their es­tab­lish­ment. Un­for­tu­nately this pol­icy was aban­doned and largely sab­o­taged by the tech­ni­cal part­ners with the ac­tive col­lu­sion of the Fed­eral and re­spec­tive state gov­ern­ments.

Con­se­quently only Peu­geot is still func­tion­ing - only just. That the LCD pol­icy failed is not in doubt as ev­i­denced by the fact that vir­tu­ally all the assem­bly plants are bank­rupt per­haps with the pos­si­ble ex­cep­tion of the Peu­geot Plant at Kaduna. And cer­tainly none of them had at­tained even 30% LCD.

What is needed for the ef­fec­tive im­ple­men­ta­tion of the NCD pol­icy is the cre­ation of a new agency or a com­mis­sion much like the Stan­dards Or­gan­i­sa­tion of Nige­ria or NAFDAC or the EFCC with an in­de­pen­dent Board of Di­rec­tors and re­port­ing di­rectly to the Pres­i­dent. Any­thing less would com­pro­mise and un­der­mine the ef­fi­ciency and ef­fec­tive­ness of the mon­i­tor­ing of the pol­icy’s full im­ple­men­ta­tion. The new agency should also be em­pow­ered to en­force its de­ci­sions other­wise it would be another tooth­less bull­dog. It should be en­abled to levy penal­ties such as fines based on the ex­tent of in­fringe­ment of the pol­icy up to the power to close down the op­er­a­tions of the de­fault­ing or­gan­i­sa­tion tem­po­rar­ily or per­ma­nently.

The NCD pol­icy can be ex­tended to all the sec­tors of the Nige­rian econ­omy such as telecom­mu­ni­ca­tions (MTN, AIR­TEL, GLO, ETISALAT, DSTV, in­ter­net, etc.), trans­porta­tion (avi­a­tion, ship­ping, rail­ways, roads, wa­ter­ways, sea­ports, air­ports, dry ports, etc.), agri­cul­ture (com­mer­cial farm­ing, ir­ri­ga­tion, food pro­cess­ing, etc.), bank­ing and in­surance, broad­cast­ing (ra­dio, tele­vi­sion, satel­lite, etc.), in­dus­tries (power, chem­i­cals, oil refin­ing, ce­ment, sugar, glass, met­als, agripro­cess­ing, de­fence in­dus­tries etc.), ho­tels and tourism, ser­vices in­dus­tries (con­sul­tancy, au­dit­ing and ac­count­ing, main­te­nance, ICT, In­ter­net ser­vices).

A very im­por­tant el­e­ment of the NCD is not only con­cerned with the be­hav­iour of cor­po­rate or­gan­i­sa­tions but also that of in­di­vid­u­als vis-à-vis this law. The worst vi­o­la­tors are the smug­glers for their ac­tiv­i­ties negate all the gains deriv­able from im­ple­ment­ing the NCD pol­icy. Stiff penal­ties need to be in­tro­duced to check these un­whole­some ac­tiv­i­ties in­clud­ing heavy fines and prison sen­tences.

It is, there­fore, a wel­come de­vel­op­ment that the Nige­rian Con­tent De­vel­op­ment Act is be­ing in­tro­duced in the oil and gas in­dus­try which will not only en­hance trans­parency in the in­dus­try’s op­er­a­tions but also open up this sec­tor for Nige­rian com­pa­nies to fully par­tic­i­pate.

We have also seen how the new Act will add tremen­dous value to the Nige­rian econ­omy lead­ing to more eco­nomic ac­tiv­i­ties in ad­di­tion to the growth and con­tin­u­ing im­prove­ment of engi­neer­ing prac­tices and fos­ter­ing of main­te­nance cul­ture that is vir­tu­ally non-ex­is­tent in to­day’s Nige­ria.

The new NCD pol­icy, we have ob­served is not re­ally new but a re­vival of the Lo­cal Con­tent De­vel­op­ment of the late 70s and early 80s in­tro­duced at the time the auto assem­bly plants were set up. We ex­am­ined the rea­sons the LCD pol­icy failed and cau­tioned that for the NCD pol­icy to suc­ceed, a new agency should be set up not only to mon­i­tor the pol­icy but to en­force it. This ap­proach would be more ef­fec­tive than the pro­posed Nige­rian Con­tent De­part­ment in­tro­duced in the NNPC. Such a De­part­ment would be mired in the red tape and bu­reau­cracy of the com­pany it­self which in any case is not known for any mea­sure of ef­fi­ciency. An in­de­pen­dent agency with its Board of Di­rec­tors re­spon­si­ble di­rectly to the Pres­i­dent and pro­vided with the author­ity to en­force its de­ci­sions.

After re­view­ing the pos­i­tive ef­fects of the NCD on the econ­omy, we found it nec­es­sary to rec­om­mend that the pol­icy be ex­tended to all other sec­tors of the Nige­rian econ­omy. By the time this is fully achieved the Nige­rian econ­omy will be truly the big­gest in Africa on a per capita ba­sis!

In the course of im­ple­ment­ing the NCD pol­icy, we will find that in­no­va­tion and com­pet­i­tive­ness are cru­cial to the pros­per­ity of any econ­omy and none of which can be achieved with­out re­search and de­vel­op­ment (R&D) es­pe­cially in science and tech­nol­ogy. In ad­vanced economies most R&D is con­ducted by cor­po­ra­tions in their ef­fort to beat their com­pe­ti­tion. R&D is ex­pen­sive and is best funded by levy­ing spe­cial taxes on pub­lic com­pa­nies to be ad­min­is­tered by an agency es­tab­lished for that pur­pose. Sabo So­dangi saboiso­dangi @ya­

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