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Analysing the impact of oil and gas local content laws on engineering development and the GDP of Nigeria

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  • Nwankwo, Ebuka
  • Iyeke, Solomon

Abstract

In order to optimise the benefits of oil and gas resources, Local Content Regulations (LCRs) have escalated in the last 15 years among oil-rich economies. In Nigeria, the Nigerian Oil and Gas Industry Content Development Act (NOGICDA) gives the Nigerian Content Development and Monitoring Board (NCDMB) the rights to drive policies and set targets for the growth of Nigerian Content (also known as local content) in the oil and gas industry. Despite the increased in-country engineering capacity observed as result of NOGICDA, the non-disclosure of basic details of contracts in the oil and gas industry creates difficulties in accessing local content contribution to Nigeria's Gross Domestic Product (GDP). Thus, a simple model based on in-country spends is proposed for the estimation of change in GDP as result of increased contracts to Nigerian companies. This proposed model is used to estimate the impact of Shell Companies in Nigeria (SCiN) spend on local contractors since 2010. The study is limited to SCiN since it has consistently published the total value of contract awarded to Nigerian companies since 2010. A yearly contribution of $5.6 billion to Nigeria’ GDP is estimated as a result the contracts awarded to Nigerian companies by SCiN.

Suggested Citation

  • Nwankwo, Ebuka & Iyeke, Solomon, 2022. "Analysing the impact of oil and gas local content laws on engineering development and the GDP of Nigeria," Energy Policy, Elsevier, vol. 163(C).
    • Handle: RePEc:eee:enepol:v:163:y:2022:i:c:s0301421522000611
    DOI: 10.1016/j.enpol.2022.112836
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    References listed on IDEAS

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