LOCAL CONTENT DEVELOPMENT IN NIGERIA OIL AND GAS INDUSTRY: CHALLENGES, PROSPECT AND THE WAY FORWARD
Abstract
The paper examined technological capability as a critical factor in Nigeria’s local content development, using indigenous and illegal refineries in the Niger Delta region as point of reference. It x-rayed the creativity, ingenuity and innovations in the establishment of indigenous refineries in the region. The paper posits that for Nigeria to move from consumption to a productive economy, indigenous technological capabilities in the oil and gas sector must be fully encouraged and harnessed. The present approach of the Federal Government in destroying the indigenous refineries should be reviewed; rather the ingenuity of the operators should be exploited and refined through articulate and robust research and development (R & D). Also, there is the need to review extant laws on refining of Petroleum products. This way the down and upstream sectors of the oil industry will be revolutionized with attendant boost on indigenous technological development and increase in indigenous production of petroleum products, particularly the Premium Motor Spirit (PMS).
INTRODUCTION
BACKGROUND TO STUDY
The now-waning global commodities boom sparked important new discussions on the role of natural resources in promoting economic development. As Nem Singh and Bourgouin (2013) write, the boom has led many to recast debates about natural resources and development. Oil, diamonds, copper and various other commodities had dominated many of African economies for a long time. In the case of petroleum, a select few African countries had been earning massive revenues from petroleum resources since the 1970s. Nigeria in particular has received hundreds of billions of dollars in the form of rents, royalties and taxes.
However commodity extraction and commodity revenues have made little positive impact in the lives of most people in the country. For this reason, there has been growing recognition in the past decade that commodity extraction alone cannot fuel economic development, but that broader policies are needed in order to foster diversification, linkages and spillover effects to the local economy. In order to achieve these objectives, a growing number of countries are implementing local content policies (LCPs).
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