Local content defined
A minimum level of local content is sometimes a requirement under trade laws when giving foreign companies the right to manufacture in a place. The Longman Business English Dictionary describes local content as when a foreign company makes products in a country, with the use of materials or parts that have been made in that country rather than imported ones. It also involves the development of local skills, technology, and use of local manpower and local manufacturing. Local content is an important element to the development of any nation, every country would like for its citizens to attain impressive heights in its economy through acquisition of jobs and opening of entrepreneurship opportunities; which also means that a considerable amount of its commonwealth remains within its borders.
The objective of local content within the Nigerian context is to increase value-added content, which would then contribute to national economic development through participation of partners, clients, company, employees and contractors. It is also geared towards technology transfer and development of local knowledge.
Benefits and challenges of local content
The drive for local content is usually accompanied with enormous potential benefits such as increase in employment opportunities, replacement of the importation of goods and services with local manufacturing as well as avoidance of the so-called paradox of plenty and the transition to advanced capitalist development.
However, inadequately drafted policies, lack of action plans, policy inconsistencies, poor policy implementation and corruption, continue to weaken the growth of local content in Nigeria.
Local content in technology
One important aspect of local content development in nations of the world today is technology. While there is a huge technology gap between developed and developing countries, local technologies in developing countries continue to grow rapidly. Such growth has subsequently stimulated economic growth and development. Chinedu Arizona-Ogwu in his article ‘Challenging the Limelight of Nigeria’s Technology’ stated that technological advancement underpins the rise in incomes as seen in developing countries, and has assisted to reduce poverty levels from 29 percent in 1990 to 18 percent in 2004. In the past – between year 2001 and 2011 – Nigeria witnessed a tele-density increase from 0.73% to 70%, however, in the midst of such growth there was still a deficit in local economic value generation because of low level support for locally produced ICT products. But in recent years, Nigeria has recorded increased participation of local companies in the technology sector. Although the software sub-sector of Nigeria’s Information and Communications Technology (ICT) sector is estimated to be worth about $12 billion, in an address by the immediate past Minister of Communications Technology, Dr. Omobola Johnson, she indicated that poor local content growth has increased capital flight.
In an effort to enable indigenous ICT companies to contribute towards national development, and to sell high quality IT products and services which can be consumed by the local and global markets, the Guidelines for Nigerian Content Development in ICT was established under the NITDA Act 2007, and came into effect on December 3, 2013. The guideline comprises of three focus areas namely: indigenous innovation, development of the local ICT industry and establishment of IP regulation and protection within the industry.
In the year 2016, the Federal Government further signed an executive order in support of the Local Content Initiative. The new order makes it mandatory for MDAs (Ministries, Departments and Agencies) to give preference to made in Nigeria goods during public procurement. The procurement of local goods and services establishes a multiplier effect for local economic development through job creation, skills development and local business development.
A good example of local content application in the ICT is the Federal Government’s policy which mandates all MDAs to “purchase all hardware products locally”, to “source and procure software from only local and indigenous software development companies; [and] where the capacity for developing such software does not exist locally, procurement, installation and support will be provided by a Nigerian company”. As a result, indigenous ICT brands including Zinox Computers, Omatek Computers and Brian Integrated Systems, have shown leadership and focus and gained about 30 percent market share in Nigeria against the likes of international brands such as Samsung, Acer, HP, Dell, Asus, Toshiba, Lenovo among others.
This is development is critical, what with the economic diversification plan of the Federal Government which seeks to improve the export base of the nation by developing sectors other than the petroleum sector and to reduce the huge capital flight that plunged the economy into recession.
Conclusion
Although some improvement has been seen in the sector, there is need for more work. Dr. Emmanuel Ekuwem, the Chief Executive Officer of an indigenous IT firm, Teledom Group, believes that government must put the right policies in place and ensure full implementation of such policies across board for patronage, protection and promotion of Nigeria’s local content. This would work hand in hand with a general consumer content law that would drive local content development in the ICT sector.
Add to that diagnosis the statement attributed to former Executive Secretary of NCDMB (Nigeria Content Development Monitoring Board), Dr. Ernest Nwapa, that, “The local content drive must be championed from the top and tied to national agenda, using a well-structured and sustainable implementation approach” and we have a winner. Funding, research and capacity development are necessary strategies to build efficiency into local operations.
If one is to be totally practical, to drive local content in technology, it must become priority for the technology industry in totality.
Reference
- Adeyemi Adepetun and Bankole Orimisan. How to grow local content in Nigeria’s $12b software sector.
- Chinedu Arizona-Ogwu. 2008. Challenging the limelight of Nigeria’s Technology. https://www.inigerian.com/oil-gas-local-content-policy-challenging-the-limelight-of-nigerias-technology/.
- Emeka Aginam. Tech sector hails FG over executive order on local content. Vanguard. 7 June, 2017
- Emma Okonji. Local Content Devt in ICT to Top Agenda in 2017. Thisdaylive. 5 January 2017
- Jesse Ovadia, 2013. Measurement and Implementation of Local Content in Nigeria – A Framework for Working with Stakeholders to Increase the Effectiveness of Local Content Monitoring and Development
- Joe Asamoah, 2010. Local Content in the Oil and Gas Industry. Accessed 6 September, 2017
- Longman Business English Dictionary
- NITDA Act. 2007. Guidelines for Nigerian Content Development in Information and Communication Technology
- NITDA: Growing the ICT sector through local content development http://authorityngr.com/2016/04/NITDA–Growing-the-ICT-sector-through-local-content-development/
- Oil and Gas. 2010. Norway: A Local Content Success Story
- Ovadia, Jesse Salah, 2012. The Making of Oil-backed Indigenous Capitalism in Nigeria’
- New Political Economy
- Nigerian local content: our perspective. Fairshores Limited, http://www.fairshoresltd.com/local-cont.html.
- Summary of guidelines for Nigeria content development in ICT.https://www.slideshare.net/momonigeria/summary-of-guidelines-for-nigerian-content-development-in-ict.