THE LOCAL CONTENT LAW AND ITS EFFECT ON JOB CREATION

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ABSTRACT

The study explored the Local Content Law and its effect on Job Creation and having Capital Oil and Gas Nigeria Ltd as its case study. The Survey technique was adopted in the study. Structured questionnaires were used for data collection, data collected were analyzed using the statistical tools of frequency counts, charts and simple percentage for the demographic data while inferential statistics of chi-square (X2) was used to test all the stated hypotheses at 0.05 level of significance. A total number of Eighty Nine (89) copies of questionnaires were administered to the respondents. The objective of the study was to investigate the effect of Local Content Law on Job Creation; vis-à-vis government legislation and protectionist policies. After all relevant data were gathered and analyzed Two (2) hypotheses were tested and the entire alternative hypotheses were accepted. The result of the first hypotheses showed that there is a significant relationship between local content law and job creation in Nigeria. The findings of the second hypothesis also revealed that government policies/legislations have an effect on the growth of SMEs in Nigeria. The study recommends that the present state of unemployment in Nigeria is a clear indication that a responsible and dynamic approach to sustainable local content development needs to be adopted by government policy makers and upstream operators to guarantee a better future for the nation’s teeming population. Technological development does not occur just by chance; rather it is a product of a nation’s sound economic management, policy reengineering, good governance and a social value system that rewards hard work and creativity.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study:

The role of the Local Content Law (LCA) in the creation of job in the face of the rather sky-rocketing mass unemployment in Nigeria cannot be overemphasized. Now, the Oil and Gas Industry (OGI) in Nigeria plays a crucial role to the sustenance of the nation and fuels her economic and development activities. The industry has been widely described as the nation’s live wire and literature abounds on its role and significance in Nigeria (Agusto, 2002; Atakpu, 2007; Odulari, 2008). Nonetheless, an estimated $8 billion is spent annually on servicing the industry in operations such as fabrication, engineering procurement, construction (EPC), Front End Engineering Design (FEED), conceptual designs and seismic studies. This figure is projected to hit $15 billion within the next few years (Business Day, 2008). Regrettably, despite these huge sums of money spent in servicing the industry, only a very little proportion of the accruable profit is spent in Nigeria.

Majority of the amounts are repatriated abroad, where most of the equipment is manufactured; and providing employment opportunities for citizens of other countries.

THE LOCAL CONTENT LAW AND ITS EFFECT ON JOB CREATION