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Entrepreneurial implications of Nigeria's oil industry local content policy

Author

Listed:
  • Ugwushi Bellema Ihua
  • Olatunde Abiodun Olabowale
  • Kamdi Nnanna Eloji
  • Chris Ajayi

Abstract

Purpose - The purpose of this paper is to investigate the efficacy of Nigeria's oil and gas industry local content (LC) policy, with particular reference to how the policy has enhanced entrepreneurial activities and served as panacea to resolving some of the country's socio‐economic challenges within the oil‐producing Niger Delta region. Design/methodology/approach - Survey data were randomly obtained from a questionnaire sample of 120 indigenes in Bayelsa, Delta and Rivers states; and subjected to factor‐analysis using varimax rotation to identify the most crucial factors likely to influence the success of the policy. Cronbach's α was also applied to ascertain the reliability of the data and overall agreement amongst respondents. Findings - The study reveals a general level of indifference amongst the respondents, and an insignificant level of entrepreneurial implication, regarding the LC policy. Notwithstanding, the need to create business prospects, jobs opportunities, and establish special quota arrangements to benefit indigenes of the oil producing host‐communities were found to be most crucial in their assessment of the policy's efficacy. Practical implications - It is expected that the policy should stimulate and open up more channels for budding entrepreneurial activities, job opportunities and wealth generation. These would mitigate situations of unwarranted militant activities, social disorder and disguised criminalities such as kidnapping and destruction of oil installations, resulting from perceived marginalisation, massive unemployment and poor living standards experienced within the region. Originality/value - The study provides insights into how the LC policy, if properly harnessed and judiciously implemented, can generate win‐win outcomes for the nation, multi‐national oil companies, host communities and indigenous entrepreneurs.

Suggested Citation

  • Ugwushi Bellema Ihua & Olatunde Abiodun Olabowale & Kamdi Nnanna Eloji & Chris Ajayi, 2011. "Entrepreneurial implications of Nigeria's oil industry local content policy," Journal of Enterprising Communities: People and Places in the Global Economy, Emerald Group Publishing Limited, vol. 5(3), pages 223-241, August.
    • Handle: RePEc:eme:jecpps:v:5:y:2011:i:3:p:223-241
    DOI: 10.1108/17506201111156698
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    References listed on IDEAS

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    1. Nwosu, H.U. & Nwachukwu, I.N. & Ogaji, S.O.T. & Probert, S.D., 2006. "Local involvement in harnessing crude oil and natural gas in Nigeria," Applied Energy, Elsevier, vol. 83(11), pages 1274-1287, November.
    2. Sunday Ikechukwu Owualah & Lawrence Ogechukwu Obokoh, 2008. "Tackling youth restiveness in the Niger Delta region of Nigeria through entrepreneurship," Journal of Enterprising Communities: People and Places in the Global Economy, Emerald Group Publishing Limited, vol. 2(2), pages 168-179, May.
    3. Zoltan J. Acs & Catherine Armington, 2008. "Employment Growth and Entrepreneurial Activity in Cities," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 25, pages 353-369, Edward Elgar Publishing.
    4. Westhead, Paul, 1990. "A typology of new manufacturing firm founders in Wales: Performance measures and public policy implications," Journal of Business Venturing, Elsevier, vol. 5(2), pages 103-122, March.
    5. Devi R. Gnyawali & Daniel S. Fogel, 1994. "Environments for Entrepreneurship Development: Key Dimensions and Research Implications," Entrepreneurship Theory and Practice, , vol. 18(4), pages 43-62, July.
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    Cited by:

    1. S. A. Adebisi & S. E. O. Umukoro & A. S. Ohiani, 2019. "Evaluating Local Content Policy of Insurance Oil and Gas Risk Portfolio as Capacity Building Strategy for Nigeria Insurance companies," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(4), pages 69-77, December.
    2. Adedeji, Abdulkabir Niran & Sidique, Shaufique Fahmi & Rahman, Azmawani Abd & Law, Siong Hook, 2016. "The role of local content policy in local value creation in Nigeria's oil industry: A structural equation modeling (SEM) approach," Resources Policy, Elsevier, vol. 49(C), pages 61-73.
    3. Kalyuzhnova, Yelena & Azhgaliyeva, Dina & Belitski, Maksim, 2022. "Public Policy Instruments for Procurement: An Empirical Analysis," Technological Forecasting and Social Change, Elsevier, vol. 176(C).

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