President Buhari’s New Local Content Order: What Lessons for Africa?

Buhari signs Executive Order promoting local content in Nigeria


Six of the world’s ten fastest growing economies are in Africa.Yet, much of Africa still relies on foreign aid, despite economic growth in parts of the continent significantly outpacing the global average. Worst still, Africa still under-exploits its local content development as foreigners believed to possess the required expertise, still take up a majority of these public contracts.

However, Muhammadu Buhari will change all that in Nigeria. Are other African countries willing to do same?

On February 5, 2018, President Muhammadu Buhari signed Executive Order 5 to improve local content in public procurement with science, engineering and technology components. With this order, expatriates looking to work in Africa’s biggest economy, Nigeria, might be out of luck.

Buhari intends to promote the application of sci-tech and innovation towards achieving Nigeria’s development goals across all sectors of the economy. Over the years, the big question has changed from, “how can Africa get more aid?” to “how Africa can sway from dependency?

An age-old tradition

The 75-year-old former military ruler has often spoken about ending the OPEC member’s dependence on oil exports while boosting local food production. His decision is, therefore, least surprising. Buhari came to power in May 2015. Then, the central bank restricted access to foreign currency to import certain goods in a bid to stimulate local manufacturing.

“I have repeatedly emphasized my vision for a Nigeria that produces what it consumes. To attain that vision, it is vital that local companies get preference in planning, designing and executing Sci, Tech & Eng. projects,” Buhari said on his official Twitter feed late on Monday.

This order also prohibits the Ministry of Interior from giving visas to foreign workers whose skills are readily available in Nigeria.

Unemployment in Nigeria

About 4 out of every 10 people in Nigeria’s workforce were unemployed or underemployed by the end of September last year. 

Buhari signs Executive Order promoting local content in Nigeria
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Outraged Nigerians blast government amidst high unemployment rates

With Africa’s largest population and biggest economy, Nigeria slipped into recession in 2016 largely caused by low oil prices and militant attacks on energy facilities in the Niger Delta. Crude oil sales account for 70% of government income. However, the price of oil fell from highs of about $112 per barrel in 2014 to below $50 in 2016. It emerged from recession in the second quarter of 2017, largely on higher oil prices.

When recession hit

Amid Nigeria’s first recession in two decades, government officials backed a Twitter campaign tagged “buy Naija to grow the naira.” The rationale was simple. If Nigerians bought local products rather than foreign goods, the economy and the troubled currency would benefit more.

However, the restriction on hiring foreigners could conflict with the government’s recent move to more open visa policies. Amid business reforms last year, the government relaxed visa rules and opened additional immigration offices. This was supposed to make it easier for foreigners to obtain residence permits.

Even with this law, the number of unemployed Nigerians that can take up mainly “specialist roles” for which expatriates are typically recruited will only be a tiny fraction of the millions of job-seeking Nigerians.

Buhari signs Executive Order promoting local content in Nigeria
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Nigeria’s unemployment rate has been spiraling since 2015

Nevertheless, this will go a long way to promote the country’s local talent, and subsequently slash unemployment rate. It’s not a blanket ban, though. This order, however, states that foreigners will be considered for jobs “where it is confirmed that such expertise is not available in Nigeria.”

How’s its tech scene doing?

For decades, Nigeria has trained some of Africa’s most talented entrepreneurs and bred some of the continent’s most vibrant startups.

Buhari signs Executive Order promoting local content in Nigeria
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Its techsphere has grown by leaps and bounds but has suffered from foreign intervention for long

But when running actual state projects, the government outsources them to foreign firms which they believe have more expertise. The effect of this decision has always killed local talent.

The question now is, will other African governments follow in Nigeria’s footsteps?

Will Africa do same?

This question seems to tilt towards Cameroon which, over several decades, outsourced more than 90% of public contracts to foreigners.

Although Cameroon has many opportunities for economic investment in the agricultural, mining, forestry, and oil & gas sectors and recently technology sectors, the country is known to kill local talent, most especially in the tech sector.

Historically, Europe has dominated the Cameroonian business environment. Recent years have witnessed the emergence of new players like China, and other African nations like Morocco, Tunisia, Algeria, South Africa, and Nigeria.

The case of Cameroon

The $4billion 1070 km Chad-Cameroon crude oil pipeline in 2003, is Cameroon’s largest foreign investment deals to date. But how many Cameroonian experts were recruited for the job? Instead, the American multinational oil and gas corporation ExxonMobil got the contract.

In 2015, the government embarked on the construction of low-income houses in Yaounde at the cost of FCFA 765 million. This could be a great employment opportunity for the millions of unemployed citizens in Cameroon. But the Chinese firm, China Road and Bridge Corporation received the contractThis same company received two similar deals valued at FCFA 1.7 billion the same year.

Last year, engineering students from the University of Maroua developed the country’s first eco-friendly vehicle. These promising engineers hoped they would serve in the new car assembly plant that was underway. However, the government outsourced this contract to the Indian Subsidiary, Cameroon Automobile Industry Company.

Cameroon’s most vibrant tech community, Silicon Mountain is home to some of the country’s best engineers, developers, and entrepreneurs. This community has produced top-notch technologists ever since it took over the country’s techsphere. Yet, many of these promising engineers and entrepreneurs hardly receive any public project from the government.

This has retarded the growth of this community which has over the years, survived on its own wits. For instance, the project for the production of 500.000 laptops the Head of State promised for higher education students in the country, was outsourced to the Chinese firm, Sichuan Telecom.

Rwanda’s case

In an effort to prioritize local production, Rwandan’s Paul Kagame launched a fight against used clothes entering the country. He decided to grow the country’s local textile industry at the expense of being a member of the African Growth and Opportunity Act (AGOA). 

Buhari signs Executive Order promoting local content in Nigeria
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Rwanda’s Kagame sticks to used closed ban despite US threats

Kagame’s strong support for local content development is one of those things that has helped Rwanda bloom today.

Remember that Vice President, Yemi Osinbajo, while acting president signed an executive order in relation to local content. It is, however, not clear to what extent the government has implemented this order. But the execution of another is in the process.

It is a welcome development if only the government is ready to implement it.

All these projects, if awarded to local firms and startups, will help in the growth of these startups. But it will also aid in developing the regions in which they operate while curbing the country’s unemployment rate.

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