Executive Order 5 And the Economy

GUEST COLUMNIST  By FEMI FALANA

The National Emergency Management Agency and the Rivers state government were busy last week evacuating not fewer than a hundred people who were trapped in the rumbles of a collapsed 7-storey building in Port Harcourt. While our sympathies go to the trapped victims of the collapsed building we should call on the government and the Council of Registered Builders of Nigeria to take urgent steps to ensure that those who bear responsibility for the disaster are seriously sanctioned. Such a prosecution will serve as a deterrent to other criminal elements that are busy erecting buildings in defiance of the provisions of the relevant laws and regulations.

Unlike the legal profession, which ensures that fake lawyers are arrested and prosecuted from time to time, the building profession has not taken any bold step to rid its rank of quacks that have hijacked the building industry. Even many foreign professionals who are not registered builders are handling building projects for governments in many parts of the country. It is, therefore, hoped that the Council of Registered Builders of Nigeria will take advantage of the provisions of the Builders Registration Act Cap B13 Laws of the Federation of Nigeria, 2004 and the Presidential Executive Order No 5 of 2018 to take control of the building industry.

Objectives of Presidential Order No 5 of 2018

In recognition of the fact that entrenching science, technology and innovation in everyday life is key to achieving the nation’s development goals across all sectors of the economy, the federal government has committed itself to the promotion of domestic and foreign investments, creation of employment and the circulation of national economy. Accordingly, President Muhammadu Buhari signed the Presidential Executive Order Number 5 (For Planning and Execution of Projects, Promotion of Nigerian Content in Contracts, Science, Engineering and Technology) of 2018 on Monday, February 6, 2018 with a view to improving local content in public procurement with science, engineering and technology components.

Executive Order 5 is a demonstration of the Federal government’s efforts to promote the application of science, technology and innovation within Nigeria. Although it is a step towards achieving the nation’s developmental goal of improving all sectors of the economy it is hoped that it will be faithfully and efficiently implemented by the federal government and all stakeholders. Being a subsidiary legislation it is stated in Paragraph 17 of Executive Order 5 that it shall be read in conjunction with extant laws, regulations and guidelines governing public procurement, process implementation and professional practice in Nigeria, as well as those that may be issued pursuant to the Order.

Strategically, the main objectives of the Executive Order 5 are the harnessing of domestic talent and the development of indigenous capacity in science and engineering for the promotion of technological innovation needed to drive national competitiveness, productivity and economic activities which will invariably enhance the achievement of the nation’s development goals across all sectors of the economy. Beyond recognising the need to promote made –in- Nigeria goods and services the Order lays the foundation for the promotion of local expertise in the manufacturing value chain. Indeed, for any nation to grow and reach its full potential it must make judicious use of its human and material resources.

In exercise of the powers conferred on him by the constitution and the Executive Order 5, the President has directed all relevant public officers and agencies of the federal government to comply with the instrument by carrying certain specific duties. The duties which have been well summarised by the law firm of Banwo and Ighodalo include the following provisions:

· All procuring authorities shall give preference to Nigerian companies and firms in the award of contracts, in line with the Public Procurement Act, 2007;

· Where expertise is lacking, procuring entities shall give preference to foreign companies and firms with demonstrable and verifiable plan for indigenous capacity development, prior to the award of such contracts;

· MDAs shall engage indigenous professionals in the planning, design and execution of national security projects and consideration shall only be given to a foreign professional, where it is certified by the appropriate authority that such expertise is not available in Nigeria;

· Nigerian companies or firms duly registered in accordance with the laws of Nigeria, with current practising licence shall lead in any consultancy services involving Joint Venture (JV) relationships and agreements, relating to Law, Engineering, ICT, Architecture, Procurement, Quantity Surveying, and etc. and

· MDAs shall ensure that before the award of any contract, Nigerian counterpart staff are engaged from the conception stage to the end of the project and shall also adopt local technology that meet set standards to replace foreign ones;

· The Ministry of Interior is prohibited from giving visas to foreign workers whose skills are readily available in Nigeria;

· The Federal Government shall introduce Margin of Preference (“MoP”) in National Competitive Bidding, in the evaluation of tenders, from indigenous suppliers of goods manufactured locally over foreign goods (MoP shall be 15% for both international competitive bidding for Goods and domestic contractors for national competitive bidding for Goods. For Works for domestic contractors, the MoP shall be 7.5%);

· Foreign companies or firms shall not be engaged in contracts for Works, Goods, and Services in the country in violation of the standard international best practices as provided for under relevant statutes such as the Companies and Allied Matters Act (CAMA), Council for Regulation of Engineering (COREN) Act, Chartered Institute of Purchasing and Supply Management Act, Public Procurement Act, and the National Information Technology Development Agency (NITDA) Act as well as other relevant Nigerian laws and regulations on acquisition of technology and conduct of public procurement;

· MDAs shall ensure that all professionals practising in the country are duly registered with the appropriate regulatory bodies in Nigeria, and shall ensure, in collaboration with the Head of the Civil Service of the Federation, that all foreign professional certificates are domesticated with the relevant professional bodies before being considered for any contract award or employment in Nigeria;

· Agreements involving any Joint Venture and Public Private Partnership (PPP) between a foreign firm and a Nigerian firm, for technology acquisition or otherwise, shall be registered with the National Office for Technology Acquisition (“NOTAP”) in accordance with the provisions of the NOTAP Act, before such contract are signed by the MDAs;

· A Nigerian company or firm shall not be disqualified from an award of contract by any MDA on the basis of the year of incorporation except on the basis of qualification, competence and experience of the management in the execution of similar contracts;

· NOTAP shall develop, maintain and regularly update a Data Base of Nigerians with expertise in science, engineering, technology and other fields of expertise while the Ministry of Interior shall take into consideration the NOTAP Data Base together with other similar data from the Nigerian Academy of Engineering; Nigerian Content Development and Monitoring Board; Federal Ministry of Science and Technology and other relevant Ministries; in determining the availability of local skilled manpower in Science, Technology and Innovation (STI) for the grant of Expatriate Quota;

· Where qualifications and competence of Nigerians are either unavailable or unascertainable, the Ministry of Interior shall ensure that Expatriate Quota for projects, contracts and programme are granted in line with the provisions of the Immigration Act and other relevant laws, and may create special immigration classification to encourage foreign expatriates (particularly from African countries) to reside and work in Nigeria for the purpose of sharing knowledge with Nigerian professionals; and

· The Federal Inland Revenue Service (FIRS) and the Ministry of Finance shall ensure that tax incentives are granted to existing machine tools companies (including foundry, machine shop, forge shop, and indigenous artisans) to boost local production of their products while tax incentives may be granted to Small & Medium Enterprises and foreign firms for the utilisation of local raw materials that are authenticated by the Raw Materials Research and Development Council (RMRDC).

It is further provided that companies or firms duly registered in Nigeria, with a valid practicing licence shall be led in any consultancy services involving Joint Venture (JV) relationships and agreements, relating to Law, Engineering, ICT, Architectural Procurement, Quantity Surveying, and so on; MDAs shall ensure that all professionals practicing in Nigeria are duly registered with the appropriate regulatory bodies in Nigeria and shall ensure they collaborate with the Head of the Civil Service of the Federation, that all foreign professional certificates are valid and registered with the relevant professional bodies before being considered for any contract award or employment in Nigeria.

From the foregoing, it is indisputable that Executive Order 5 is designed to promote science, innovation and technology acquisition and the participation of local companies in government procurement activities. Hence, it recognises the role of technology and innovation in achieving growth, development and key economic projections of the federal government, which is most welcome.

To ensure that the objectives of the executive order are achieved the federal government has set up a Presidential Monitoring and Evaluation Council headed by the President and comprising the Vice President, Ministers and Chairman of the Governor’s Forum. The Council is saddled with the responsibility to monitor the implementation of the Order.

Even though the President is required by the Order to direct all Ministries, Departments and Agencies (MDAS) to engage indigenous professionals in the planning, design and execution of all projects in line with the provisions of the Executive Order it has not stopped professional bodies from ensuring that only qualified persons are registered to practice any trade or profession in the country.

However, since we are operating a federal system of government it should be realised that there are certain provisions of the Executive Order 5, which are not binding on state governments. Therefore, state governors are advised to enact similar legislations with respect to the design, award of contracts and execution of projects in all the states of the federation.

It is pertinent to recall that the former military regime promulgated the indigenisation decrees, which transferred the management of the economy to Nigerians.

Unfortunately, the law and regulations made thereto were repealed in 1986 to give way to the full control and management of the economy by imperialism when the Structural Adjustment Programme was imposed on the nation by the Ibrahim Babangida regime. It was an era, which marked the commencement of the sale of the nation’s major public enterprises to foreign and local capitalists and rent seekers.

But for public resistance the interests of the Nigerian people in the Nigerian Liquefied Natural Gas (NLNG) would have been sold by the Buhari administration. However, the presidential candidate of the Peoples Democratic Party, Alhaji Atiku Abubakar has threatened to sell the commanding heights of the economy including the Nigerian National Petroleum Corporation to some unnamed interest groups.

It is common knowledge that the Petroleum Training Development Fund (PTDF) was established by the federal government to provide scholarships for Nigerians to acquire requisite knowledge in petroleum related courses. But after several decades of the existence of the PTDF foreign nationals largely dominate the oil and gas industry. It is also on account of lack of competence and economic power that many Nigerian stakeholders in the oil and gas industry have not been able to take advantage of the Local Content Act 2010 which has provided for local content in all projects executed in the oil and gas sector.

It is my submission that unless the Nigerian people are prepared to defend the objectives of the Executive Order, the neo-colonial peripheral capitalist system operated by the government of Nigeria cannot muster the political will to compel all procuring authorities to give preference to Nigerian companies and firms in the award of contracts and execution of projects in line with the Public Procurement Act 2007.

In contrast, for instance, the government of Rwanda has rejected the request of the Trump administration to jettison the development of its local textile industry and continue to import second hand dresses worth $2 billion per annum from the United States of America. With respect to Nigeria, the officials of the federal government have continued to adorn themselves in dresses made from imported textile materials notwithstanding the directive of Executive Order No 5 that ‘Made- in- Nigeria’ products be promoted.

However, the ministry of interior is to ensure that all expatriate quota for projects, contracts and programmes are granted in line with the provisions of the Immigration Act and other relevant laws.

No doubt, the prohibition of the ministry of interior from giving visas to foreign workers whose skills are readily available in Nigeria would create some job opportunities for Nigerians. But unless many unemployed and unemployable young people are trained and equipped it might be difficult to prevent procuring entities and employers of labour from giving preference to foreign firms and nationals with requisite skills and competence.

For example, as local artisans are not well trained many people prefer to procure the services of artisans from neighbouring countries.

Conclusion

While Executive Order 5 may be said to have laid the foundation for the gradual take-off of the envisioned standardisation and innovative technologies which engender capacity utilisation and development, the government has not made adequate provision for the development of science and technology. Apart from encouraging the teaching of science and technology in all schools the federal, state and local governments should promote and support research with substantial funding on a regular basis.

In view of the growing culture of official impunity in the country the executive order ought to be amended to provide sanctions for public officers who may contrive its provisions.

In order to ensure the overall development of the country with respect to the planning and execution of projects and promotion of Nigerian content in science and technology it is high time that all the state governments adopted the Public Procurement Act together with Executive Order No 5 of 2018.

In the alternative, the President should liaise with the leadership of the National Assembly with a view to having the executive order passed into law.

I am confident that the National Assembly will not hesitate to pass the bill having regards to the huge benefits, which the nation stands to derive from the legislation.