Spillovers of local content policies in Nigerian Oil and Gas Industry

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Rahim, A.G.
Ignatius, I.U.
Jimoh, B.
Obanla, R.O.
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Unilag Journal of Humanities
Many citizens of resource-rich nations tend to be mere observers despite huge exploration activities in their land. Nigeria oil and gas industry is a classic instance of an enclave sector of the nation’s economy where employments opportunities are not only limited but the requirements of available jobs are not readily available locally. This paper examined the value that oil and gas operations pass to the local and national economy beyond the resource proceeds. To accomplish the objective of this paper, a systematic review of literature was presented and discussed. The paper deliberated that the discovery of natural resources in Nigeria comes with much exhilaration/expectations, propelling the need to extend the benefits of the extractive industry through local content (LC) initiatives. The paper discovered that LC is designed to enhance value-added, correct market failures/externalities, and support employment and other social objectives. Unfortunately, the policy has fueled distortion among policy objectives, global regulation, and institutional structures in addition to misallocation of resources and ineffectiveness in the system. However, providing benefits to the communities where extractive companies operate is no longer a choice but a commercial necessity that is increasingly mandated through law. Nevertheless, creating strong LC outcomes can be very challenging because of the technical requirements of the industry, which often limit the possibility of developing backward and forward links into the local economy. The paper concluded that LC policy if properly implemented can improve local capabilities that will make oil and gas work for Nigeria’s economic development. The paper recommended the need for improved policy measures and legal framework to strengthen the Nigerian oil and gas industry.
Scholarly article
Local content , Extractive industry , Natural resources , Backward and forward linkage , Oil and gas industry
Rahim, A.G., Iganatius, I.U., Obanla, R.O., & Jimoh, B. (2018). Spillovers of local content policies in Nigerian Oil and Gas Industry