• Sunday, June 23, 2024
businessday logo

BusinessDay

Local Content: FG moves to exclude foreign firms from contracts below N5billion

2022 Budget speech: Budget of Economic Growth and Sustainability

The Federal Government (FG) on Tuesday declared that contracts not above N5 billion will no longer be awarded to any foreign firms in the country.

The government said this is to patronise and strengthen indigenous firms as part of an amendment in the local content laws in the country.

Making the declaration at the public hearing conducted by the National Assembly joint committees on Local Content, the Minister of State, Works and Housing, Abubakar Aliyu, said contracts worth N5billion and below would be the exclusive preserve of indigenous firms.

“As part of measures being put in place for the strengthening of local content laws in the country, contracts that are not more than N5billion are to be the exclusive preserve of indigenous firms or companies for bidding, award, and execution,” he said.

But when asked by the Chairman of the Committee, Senator Teslim Folarin (APC – Oyo Central) on whether the new policy would affect construction giants like Julius Berger, the minister said proper categorisation would be made to determine that.

Read also: Outrage as CBN gives 4 foreign firms nod to import maize

“Julius Berger PLC is more or less an indigenalised foreign firm going by a high involvement of Nigerians in its operations and management over the years which makes its categorization in this respect a bit difficult”, he explained.

He added that other measures like registration of expatriates and proof of valid residence permit etc. were also part of recommendations being made into the local content development bill.

Earlier in his remarks, Folarin said the three bills being considered were very important to the development of the country’s oil and gas industry, which is one of the most viable sectors of the economy.

He explained that the bills, among other things, sought to consolidate on the gains of the implementation of local content component in the oil and gas industry, pursuant to the enactment of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, 2010.

“One of the Bills also seeks to provide the needed legal framework for the implementation of local content in other key sectors of the economy, including power, ICT, Construction, and Transportation.

“The enactment of this Bill, will no doubt, provide the legal basis for the enforcement of the Presidential Executive Order No. 5 of 5th February 2018, which seeks to improve local content procurement with regards to science, engineering, and technology components of the economy,” he said.