The recent Executive Order signed by President Muhammadu Buhari boldly underscores the administration’s determination to use the country’s human and material resources to actualise its Economic Recovery and Growth Plan unveiled last year. Specifically, the Executive Order 5 is aimed at improving local content in public procurement with emphasis on science, engineering, technology and innovation, towards achieving Nigeria’s developmental goals across all sectors of the economy.
With the Executive Order, the Ministry of Interior has been given powers not to give visas to expatriates whose skills are readily available in Nigeria. A statement by the presidency to that effect said the Order was pursuant to the authority vested in the President by the Constitution in line with the Public Procurement Act 2007.
This Executive Order is long overdue. Previous policy enunciations to promote the use of locally sourced materials and skills in production and operations have not fully yielded the expected results. We believe that the latest effort by the Buhari administration will support this quest. The Nigerian Content Act signed into law in the early days of the former President Goodluck Jonathan government is, perhaps, the single most important piece of legislation designed to address this problem, particularly in the critical Oil & Gas sector of the economy. It, however, did little to address the issue in the other important sectors, which the Executive Order 5 has now deliberately articulated, and will now hopefully enforce. Henceforth, skilled and competent Nigerians should be given priority in the execution of government contracts. The much-desired industrial revolution and technology transfer will be a mirage without a sustained policy to develop local skills, resources and materials.
As a matter of fact, the failure of the country to attain the old target of 70 percent local content by 2010 is largely a result of inadequate capacity building on the local front. Undoubtedly, a Nigerian content strategy as articulated in the Executive Order has numerous advantages. Beyond being a growth factor in the economy, utilisation of local content, especially at this time that diversification is the catchphrase, should optimise the use of local materials and empower local professionals. It should also boost local production capacity, increase the country’s Gross Domestic Product (GDP) and create more jobs for Nigerian professionals.
According to a global oil & gas survey, expatriate oil workers in Nigeria are the highest paid in Africa, with an average annual salary of N22.25 million, while a local employee receives a third of that amount. An expatriate consultant receives six times the average annual salary of a local employee. In the aviation sector, Nigeria is said to be losing a hefty N500 billion annually to expatriate pilots.
In addition, boosting local content will stimulate the participation of communities in the local supply chain and provide a direct platform for collaboration with local manufacturers of the equipment needed in particular sectors of the economy. For instance, it is common knowledge that for too long now, housing delivery in the country has been a matter of assembling imported materials such that about 80 percent of the materials used in housing construction is imported into the country. It is also estimated that big ticket contracts and construction jobs like roads and infrastructure go to foreign firms.
This is one of the reasons why the current push for local content should be given all the support it deserves. Sadly, Nigeria is currently listed as the most expensive housing market in the world. One of the reasons for this is the cost of materials, and to a lower extent, the cost of labour. Government should continue to push the boundaries to improve local content, not only in science, technology and engineering, but also in all critical sectors of the economy so that its impact can be clearly felt in the economy.
We, therefore, advise government agencies that will drive the Executive Order, such as the Ministry of Interior and the Nigerian Content Development and Monitoring Board (NCDMB), to see the order not as a sprint, but a marathon. It should involve a continuous and well focused process to ensure that the order is implemented to the letter.
It may also be imperative to review certain provisions of the Public Procurement Act 2007 to ensure it conforms with the Executive Order. This is because of the allegations in some quarters that there is no transparency in the process of accessing the $600m Nigerian Content Fund. The best way to utilise the fund is to use it to guarantee some of the loans obtained by local contractors from the banks and for capacity development.
Overall, government should put all necessary measures in place to ensure that the objectives of the Executive Order are realised.