Nigerian govt bars foreign firms from bidding for contracts below N5bn

Contracts of below N5 billion will no longer be awarded to foreign companies in Nigeria, the Nigerian government said on Tuesday.

The decision is in furtherance of the local content laws and will facilitate patronage of indigenous firms and services, Abubakar Aliyu, minister of state for works and housing, disclosed at a public hearing arranged by the National Assembly’s joint committees on local content.

“As part of measures being put in place for strengthening of local content laws in the country, contracts that are not more than N5bn are to be exclusive preserve of indigenous firms or companies for bidding, award and execution,” Aliyu said.

The minister, when asked by Teslim Folarin, chair of the committee, whether the policy shift would affect construction companies like Julius Berger, said appropriate categorisation would be done to determine that.

Read also: Senate moves against foreign companies involved in oil spill, environmental degradation

“Julius Berger PLC is more or less an indigenised foreign firm going by high involvement of Nigerians in its operations and management over the years which makes its categorisation in this respect a bit difficult.”

Procedures including registration of expatriates and evidence of valid residence permit among others are also part of the prescriptions being embedded into the local content development bill.

Senator Folarin noted the three bills under consideration were crucial to the progress of Nigeria’s energy sector, which is one of the most viable economic sectors.

The bills intend to strengthen the gains of the execution of local content component in the oil and gas industry, pursuant to the enactment of the Nigerian Oil and Gas Industry Development Act 2010.

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