Local content act implementation and its impact on Nigeria economy: an appraisal

Abstract

This article is on Local Content Act Implementation and its Impact on Nigeria Economy: An Appraisal. The goal was to assess the local Content Act implementation in Nigeria in order to ascertain its impact on the Nigeria economy. The paper followed a qualitative research design to gain insight into the nature and implementation of local content law in Nigeria. Descriptive and observation methods were used to critically examine local content and its implementation in Nigeria. The article is theoretical in nature and basically draws its arguments from content analysis of secondary data. Observations from the study revealed that; high cost of funds is a factor that jeopardizes indigenous service companies’ ability to compete effectively with most of their foreign counterparts who are well endowed with capital; despite the extant local content Act, there is little involvement of local firms in the oil and other industries and this is often attributed to lack of facility to compete and the failure to meet industry requirements, and there is high level of non-compliance to the Local Content regulations by some multinationals. It is therefore the position of this paper that Local Content Act plays a vital role in the advancement of the Nigerian financial system especially in the Oil and Gas Industry as it gives first consideration to Nigerian independent dealers, thus enabling Nigerian Companies to contribute immensely towards the expansion of the Nigerian financial system. It is therefore suggested that there is need for the legislature to expand the local content law to cover more sectors of the Nigerian economy so as to improve the capacity of Nigerian businesses and promote the employment of Nigerian workforce.