What are local content policies?
Local content requirements impact the global economy The fastest growing of these measures are local content requirements (LCRs), which are policies imposed by governments that require firms to use domestically-manufactured goods or domestically-supplied services in order to operate in an economy.
Why a government would implement a local content requirement?
They are rules that a company must derive a certain amount of the final value of a good or service from domestic firms, either by purchasing from local companies or by manufacturing or developing the good or service locally. Governments use LCRs in an attempt to protect and develop domestic industries.
What is local content policy in Nigeria?
The sole purpose of the Local Content is to increase Nigerian participation in the oil and gas industry by prescribing minimum thresholds for the use of local services and materials for the promotion of technology and skill to the Nigerian labour in the oil and gas industry.
What is a local content?
Local content is the value that an extraction project brings to the local, regional or national economy beyond the resource revenues. The value brought to the local, regional or national economy from an extraction project is referred to as the local content.
What is the local content?
When was local content established?
The Nigerian Oil and Gas Industry Content Development (Local Content Act) 2010 was enacted to promote the indigeneous participation in the Nigeria’s oil and gas industry for the purpose of improving the economic and social well being of those engaged in operating in the oil and gas industry.
What is local content India?
– “Local content” means the amount of value added in India which shall, unless otherwise prescribed by the Nodal Ministry, be the total value of the item procured (excluding net domestic indirect taxes) minus the value of imported content in the item (including all custom duties) as a proportion of the total value, in …
What is local content in Tanzania?
“local content means the quantum of composite value added to, or created in, the economy of Tanzania through deliberate utilization of Tanzanian human and material resources and services in the petroleum operations in order to stimulate the development of capabilities indigenous of Tanzania and to encourage local …
When was local content established in Nigeria?
1971
The local content policy action started in 1971 through the establishment of the Nigerian National Oil Corporation, (NOC). NOC was established as a vehicle for the promotion of Nigeria’s indigenization policy in the petroleum sector.
What are the targets for local content policy?
The targets for LC policy in increasing local content development were set progressively −45% local content in 2007, 70% in 2010 ( Ihua et al., 2011, Ariweriokuma, 2009 ), and more than 80% by 2020 ( Bakare, 2011 ).
How does local content policy ( LC ) benefit developing countries?
The question of how adopting local content policy (LC policy) benefits the economic growth of developing oil-rich countries is hardly new but is a continuous debate that often centers on increasing the value-added that LC policy can create within the oil industry.
Why are local content requirements put in place?
Since the financial crisis a decade ago, more than 340 localisation measures, including over 145 new local content requirements, have been put in place by governments largely in an effort to improve domestic employment and industrial performance.
How does LC policy affect local value creation?
However, we found that local value created in the Nigerian oil industry as a consequence of LC policy is lower than the expected target. This implies that the implementation of the policy needs to be closely monitored to ensure its efficacy towards increasing economic development. 1. Introduction
