The President, on 2nd February, 2018, signed an Executive Order for Planning and Execution of Projects, Promotion of Nigerian Content in Contracts and Science, Engineering and Technology (“Order”).
The Order requires Ministries, Departments and Agencies to (a) accord preference to Nigerian companies in the award of contracts except where expertise is lacking locally; (b) utilize Nigerian firms as lead consultants in JV arrangements with foreign firms relating to law, engineering, ICT, architecture, procurement, quantity survey e.t.c.; (c) adopt local technology to replace foreign ones where it meets the required standard, and (d) engage the services of Small and Medium Scale Enterprises (“SMEs”) for local production of construction materials.
The Order also requires the National Office for Technology Acquisition and Promotion (“NOTAP”) to register agreements and Public Private Partnerships involving technology acquisition between a foreign firm and Nigerian firm and to establish a database of Nigerian experts in the field of science, engineering, technology and similar fields. This database shall be taken into consideration by the Ministry of Interior along with the database of the Federal Ministry of Science and Technology, Federal Ministry of Power, Works and Housing, Nigerian Academy of Science, Nigerian Academy of Engineers, e.t.c. in determining applications for expatriate quota positions. To this end, visas will not be granted to expatriates whose skills are readily available in Nigeria.
The Order further provides that the Federal Inland Revenue Service and the Federal Ministry of Finance shall ensure that tax incentives are granted to existing machine tools companies, including foundry, machine shop, forge shop and indigenous artisans to boost production of their products. Tax incentives may also be given to SMEs and foreign firms for the utilization of local raw materials subject to the authentication of the raw materials by the Raw Materials Research and Development Council.
The Order sets up a Presidential Monitoring and Evaluation Council (Council) headed by the President. In the event the Order is violated, the punishment stipulated in extant Public Service Rules and laws governing public procurement, professional practice in Nigeria etc will apply.
The effect of this Order is that companies soliciting contracts from MDAs within Nigeria must ensure that their bid documents comply fully with the local content requirements under the Order. There may also be a basis for tax rebates where local raw materials are used in the implementation of projects.