The Federal Government of Nigeria earlier this year announced plans to establish a Gas Revolution Industrial Park (GRIP) worth $20 billion in its bid to reinforce its commitment to the development of the Niger Delta region. This initiative, to be situated in Ogidigben in Delta state, is intended to be a joint effort between the Federal Government and a group of international investors put together under a consortium by a Dubai-based Firm, Arabian Gulf Mechanical Centre (AGMC). The Federal Government has also designated the proposed Park a Free Trade Zone.
In view of this initiative, and its certain requirement for labour of all categories, it is important for the Federal Government of Nigeria and other stakeholders to consider and ensure the implementation of the provisions of the Nigerian Oil and Gas Industry Content Development Act 2010 (NOGICDA) in the execution of the project. The NOGICDA was put in place to ensure development of Nigerian content in the oil and gas industry and it applies to all matters pertaining to Nigerian content therein. Section 2 of the NOGICDA makes it compulsory for all regulatory authorities, operators, contractors, subcontractors, alliance partners and other entities involved in any project, operation, activity or transaction in the Nigerian oil and gas industry to consider Nigerian content as an important element in their overall project development and management philosophy for project execution. Section 51(1) of the same Act also requires all operators to retain only Nigerian Legal Practitioners for all legal services required in the industry.
Also worthy of discourse is the declaration of the GRIP as a Free Trade Zone by the Federal Government. This means that companies setting up industries in the GRIP will get favourable reliefs from the government by virtue of the provisions of the Nigeria Export Processing Zones Authority Act 1992 (NEPZA). By the provisions of Section 8 of NEPZA, approved companies set up in a free trade zone area are exempted from all Federal, State and Government taxes, levies and rates. Other reliefs to which companies in the GRIP will be entitled include: allowance of repatriation of foreign capital investment in the zone at any time with capital appreciation of the investment, remittance of profits and dividends earned by foreign investors in the zone and absence of requirement of import or export licence.
The initiative is certainly a win-win situation for the country as well as the foreign investors. The use of local personnel in the establishment and management of the GRIP will result in transfer and exchange of technology and expertise as well as the creation of direct and indirect employment. The investors will also benefit from significant tax incentives and waivers that will be granted companies in the GRIP.
It is therefore not too much to expect that the implementation of the GRIP will indeed give a much needed fillip to the oil and gas sector and the Nigerian economy as a whole.