President Bola Tinubu has directed the Nigerian Content Monitoring and Development Board (NCMDB) to consider the practical challenges of insufficient in-country capacity for certain services.
According to the presidential directive on local content compliance requirements, issued in Abuja on February 28, 2024, the board is expected to act in a way that does not impede investments in the oil and gas sector.
Tinubu issued the policy directives in exercise of the powers conferred on him by section 100 of the Nigerian Oil and Gas Industry Content Development Act (NOGICD) 2010.
According to the document, it has become important to establish policy directives to tackle the challenges, with the primary objective of attracting investments into the sector and restoring economic growth by supporting a conducive operating and investment environment.
The president said NCMDB, in its implementation of the NOGICD 2010, must take into account “the practical challenges of insufficient in-country capacity for certain services”.
“The board shall act in a manner that does not hinder investments or the cost competitiveness of oil and gas projects,” Tinubu said.
“The Board shall not approve a Nigerian Content Plan (NCP) that contains intermediary entities lacking the essential capacity to perform the services.”
According to the policy, the board will only approve an NCP that consists of contractors that meet the legal definition of Nigerian content and demonstrate genuine, significant, and tangible capacity to independently execute projects within Nigeria.
“The approval of an NCP by the Board that contains entities acting solely as intermediaries, with no demonstrable capacity to execute the project or activity, shall be considered a violation of the local content requirements,” Tinubu said.
“The Board shall develop guidelines for assessing and verifying the capacity of companies seeking contracts for specified activities under the under the Act, in consultation with industry stakeholders.”
According to the regulation, the directive shall take effect immediately.
The federal government said the NCDMB will work out the modalities for implementing the directives.