By Chibuike Nwabuko
Abuja (Sundiata Post) -Former President Dr. Goodluck Jonathan has urged African countries, especially Mozambique, show transparency and carry the private sector along in the formulation of their local content laws, as a means of making the policy to be more effective and beneficial to the people.
Dr. Jonathan stated this at the 4th edition of the Financial Times Mozambique Economic Summit on Wednesday while addressing the Mozambican officials at the summit
He noted that the policy which is meant to promote local participation in the economy
should be designed to encourage
the international companies to train and deploy local capacities in their operations.
Speaking directly to Mozambican officials at the summit who
sought his advice on how to
perfect the nation’s local content law, Jonathan said: “First and foremost the local content law is not
designed to frustrate
international investors, especially the international oil companies (IOCs). If a law frustrates them, then the
host country may also lose because
it may not have the requisite capacity. The idea is that the law must encourage them, in this case,
to deploy people from Mozambique
where the capacity is available and also to encourage them
to develop capacity.”
The former President also shared the experience of Nigeria’s
power privatisation and gas sector
reforms with the audience. He traced the history of power generation in Nigeria to 1896 when a 25 MW plant was
built in Lagos. The former President provided a
bird’s-eye view of
Nigeria’s power sector privatisation, emphasising the need to
carefully handle such key issues as cost reflective
tariff, regulation, labour as well
as credibility and public support for the reform programme.
He however observed that Nigeria was still experiencing
challenges with electricity
supply, despite the privatization of the sub-sector, but expressed the hope that whatever limitations being
experienced now would be overcome
with time.
He further advised Mozambique to embrace privatisation now
that they enjoy relatively steady
power supply and economic growth so that the process would have been perfected in view of future
demands for more power which
development brings.
Speaking further on the Nigerian Oil and Gas Industry
Content Development (NOGICD) Act
which came into effect on 29th March 2010, Jonathan stated that the development helped reposition
the country for
workforce capacity building and sustainable growth.
He noted that before the local content law came on stream,
Nigeria already had the cabotage
law which made it possible for Nigerian vessels and indigenous firms to participate effectively in the
commercial transportation of goods and services
within the nation’s
coastal and inland waters. This, according to him had a
positive impact on the growth of
the local economy.
“The local content law even took the issue of local capacity
building further. The local
content policy helps a nation to grow local capacity and utilisation of resources, especially if a
board is set up for that purpose.
“ If the companies here are resisting the policy, it may have
to do with the way the law is
being crafted. However, don’t forget that people generally fear the introduction of anything new or different
from what they are used to. That is why it is
important to carry them
along so that they will see that your intentions will be
mutually beneficial to your
country as well as the investors. They must be properly briefed in a way that will make it clear that
the local content law is not to
punish or short-change them. It should actually
form part of their corporate responsibility which requires the
activities of the investor to impact positively
on the host country and the
environment. The local content law only gives a legal backing to that responsibility by ensuring and enforcing
compliance. Like I said earlier,
if it is designed or implemented like a punitive law, it
will discourage investors.
“If well implemented the local content law, will go a long
way towards building the capacity
of the local workforce and promoting entrepreneurship. The law also makes it possible for locals to handle
some levels of contract in the oil and gas
industry and also encourages the
international companies to collaborate with local partners to be able to win such contracts.
“The idea is that if a country is making big money from its
sale of oil and gas, it must
strive to improve and positively impact the well-being of the citizens. It goes beyond building
roads and other infrastructure. It
has to have a direct impact on the capacities and well-being of the people. The big corporations mining
these resources
should also have a considerable presence in their areas of
operation in such a way that it
will be beneficial to the host communities.
“In the case of Nigeria, the local content policy has helped
to develop the capacities of the
youths in many technical areas like surface and underwater fittings, welding and other areas of
operations in the
sector. It really allows wealth generated in the oil and gas
sector to permeate and impact
the general society.”