On July 2nd, 2025, Senator Umar Sadiq (Kwara North) presented a motion stating The Preponderant Need to engage Local Indigenous Contractors for the execution of Small-Scale Federal Government Contracts to stimulate Grassroots Economic Development.
The Senate:
Notes that the Federal Republic of Nigeria is committed to fostering inclusive economic growth, reducing poverty, and creating sustainable development and employment opportunities for its teeming population;
Also notes that Small And Medium-Sized Enterprises (SMEs) and Local Contractors represent the bedrock of the Nigerian economy, possessing vast potential for job creation, wealth distribution, and local capacity building, particularly at the grassroots level;
Further notes that despite existing Local Content Policies and Initiatives including the Renewed Hope Infrastructure Development Fund by the current administration, numerous small-scale Federal Government contracts, particularly below Fifty million Naira (₦50,000,000), are often executed by larger, non-indigenous firms, thereby limiting direct economic benefits to local communities and stifling the growth of nascent indigenous enterprises across the 774 local government areas; and
Reiterates that engaging local contractors for such contracts would significantly enhance community participation, job creation, increase productivity, foster a sense of ownership in public projects, and ensure that government spending directly circulates within local economies
Accordingly resolves to:
i. Urge the Federal Government through BPP (Bureau of Public Procurement) to immediately adopt and implement a policy mandating the preferential engagement of local and indigenous contractors whose principal place of business or whose workforce primarily resides within the Local Government Area (LGA) where the project is to be executed for all Federal Government contracts;
ii. Also urge the Federal Government to consider a 3-Tiered contract bidding system with a gradual increase in the bidding entry requirements and grant eligible local contractors engaged in these small-scale Federal contracts a Tax Exemption Certificate ( from certain state or federal levies/withholding taxes related to these specific contracts for a defined period), to boost their working capital and profitability;
iii. Further urge the Bureau of Public Procurement to allow local indigenous contractors to bid for contracts in their local government areas system with the maximum bid value at 20 million Naira and 50 million Naira as Tier 1 and Tier 2 respectively, to encourage low-income and tax-exempt CAC-registered contractors to qualify to bid for simple projects; for example small supplies such as agricultural input, empowerment materials and food items, construction of classrooms, culverts, as well as provision of water and sanitation facilities amongst others, and above 50 million Naira at Tier 3 for more experienced contractors who will require Federal Government comprehensive documentation as already exists;
iv. Equally urge the creation or strengthening of the FIRS local desk within the 774 local government areas, to enable easy and direct provision of tax exemption and clearance certificates through the available banks within the local government for a seamless delivery of necessary documentation for prequalification; and
v. Mandate the Committee on Procurement to invite BPP for engagements on planning and implementation.
