REGULATORY FRAMEWORK FOR THE TRANSFER OF

TECHNOLOGY IN NIGERIA: CHALLENGES AND

PROSPECTS

This paper presentation will be logically phased under

concrete heading. Foremost a cursory look at the
background information relating to the under discourse will
be put in place. Also is the definition of essential terms
relating to the subject- matter. Subsequently, we shall
embark upon the examination of legal frameworks and the
relevant bodies responsibility for the transfer of technology
in Nigeria, as well as the challenges and prospects. And then
draw our conclusion and recommendation.

Background Information
Technology transfer is an important aspect of the new
international order, it has been perceived by Third World
states that there can be development without technology
and that the fastest ways of facilitating their development is
with the acquisition of readily available technology from the
industrialized, developed nations of the world. The history of
Nigeria development has essentially been a reflection of the
developments in other third worlds and to a greater or lesser
extent any examination of the Nigerian experience will show
the practical effect of the problems encountered and
solutions applied by the class of states for technology
acquisition.
The 1970’s was an era of indiscriminate import of various
technologies into developing countries – Nigeria especially.
Industrialized efforts mainly of turnkey packages with
technological link to the environment. Uncoordinated
technology inflows. Interaction code of conduct on Transfer
of Technology to developing countries was lacking.
Technology transfer contracts contained a very unfair
conditions: monopoly pricing, restrictive business practices;
export restrictions, high royalty rates; tie-in clauses (with
respect to equipment, raw materials, components etc) little
comprehensive training and management succession
programmes, poor/weak local Research and Development
activities etc.

It is to be noted that the recent increasing privatization of

knowledge, the globalization of technology and the world
economy, the growing technological protection is on the part
of the developed countries, the emergence of new
technologies and the rise of strategic alliances primarily
among the developed countries are threats of diminishing
access to cheap technologies by developing countries like
Nigeria. These developments, as highlighted above makes it
imperative to have a clearer technology acquisition and
development policy that will facilitate access to and mastery
of technologies, create an environment conducive to
technology acquisition and innovation, and promote a more
efficient process of selecting, acquiring, negotiating and
assimilating, imported technologies. To this end, a significant
change in the complexion of institutions involved with
technology transfer and acquisition is desired specifically
that shift to a technology ‘user friendly’ approach oriented
towards promotional and advisory services is needed
compared with the previous regulatory approach of
technology institutions of the 70’s.

0 Definition of Terms
At this juncture, it is unavoidably imperative to define each
individual word in its ordinary parlance before a
comprehensive definition of the term “Technology Transfer”
will be successfully undertaken. In this case the word
‘technology’ and ‘transfer’ will be definite in isolation in their
literal or ordinary meanings. According to the Dictionary of
Contemporary English defines the word ‘technology’ as “new
machines, equipment, and was of doing things” is being
defined as a the process by which someone or something
moves or is moved from one place , job etc to another. While
the Black Law Dictionary defines transfer as “to convey or
remove from one place or one person to another.3

In a more technical sense, the term technology has been

used in several context depending on the point of view of
the user. A definition that is sufficiently comprehensive for
the purpose of this research is that given by the World
Intellectual Prosperity Organization (WIPO) in their document
“Licensing Guide for Developing Countries” it defines
technology as4:
“The systematic knowledge of the manufacture of a
product, the application of a process or rendering of a
service, whether, that knowledge be reflected in an
invention, an industrial design, a utility model, or a new
plant variety or in technical information or skills or in
the services and assistance provided by experts for the
design, installation, operation or maintenance of an
industrial plant or for the management of an industrial
or commercial enterprise or its activities”
in a more holistic approach, technology transfer according to
the wikipedia5 “is the process of sharing of skills, knowledge,
technologies, methods of manufacturing, samples of
manufacturing and facilities among governments and other
institutions to ensure that scientific and technological
developments are accessible to a wide range of users who
can then further develop and exploit the technology into new
products, processes, applications, materials or services.

While Daniel Chudnovsky in a report prepared at the request

6
of IDRC defines “technology transfer” as “… the process by
which different elements of production knowledge which are
not directly embodied in machinery and equipment are
transferred to another entity through a contractual
arrangement. Elements like patents, copyrights and trade
marks, technical services, formulae, designs, product and
process engineering, training of personnel are generally
included in a technology transfer contract, though in
different forms and proportions.

In addition to the technology transferable through

contractual arrangements either between independent firms
or between parent and subsidiaries within transnational
corporations (TNCs). Technology transfer can also take place
through non-commercial means as in the form of technical
journals, migration of skilled people, training of students etc.

REGULATORY FRAMEWORK FOR THE TRANSFER OF

TECHNOLOGY IN NIGERIA

Many companies, universities and governmental

organizations, now have an “Office of Technology Transfer,
dedicated to identifying research which has potential
commercial interest and strategies for how to exploit it. This
applies to the Nigerian experience with the establishment of
National Office for Technology Acquisition and Promotion
(NOTAP).

In this direction the activities of this body have been

adequately backed by an Act referred to as National Office
for Technology Acquisition and Promotion Act, Cap. N62 LFN
2004. This regulatory body for the transfer of technology
called NOTAP can best be x-rayed under the following
headings:-

3.01 ESTABLISHMENT OF NOTAP

The body was established pursuant to the National Office of
Industrial Property (NOIP) by Decree No. 70 of 1979 which
was changed to National Office for Technology Acquisition
and Promotions (NOTAP) as amended.7 It was established as
a national agency for efficient acquisition (transfer) of
technology under more equitable conditions. The name was
changed from NOIP to NOTAP in 1992, in order to ensure
that new name adequately reflect its entire functions and to
avoid any misconception with regard to the activities of
NOTAP and those of Registry of patent and trademarks.

NOTAP was established with the assistance of the United

Nations’ Development Programme (UNDP). The United
Nations’ Industrial Development Organization (UNIDO),
became operational in 1983 with a mandate to:
“Perfect the interest of the Nigerian economy by
assisting indigenous enterprise in their negotiations
with foreign partners so that the terms and conditions
which they enter into technology agreements are
reasonable , fair and equitable and so that obnoxious
 clauses which refrain their economic gains and
innovative capabilities are explained from all
technological or collaboration agreements8”
NOTAP is a body corporate with perpetual succession and a
common seal and may sue and be sued in its corporate
name.9
3.02 FUNCTIONS OF NOTAP
The main functions of NOTAP are set out in the Act as
follows:
a) The encouragement of a more efficient process for
the identification and selection of foreign technology.
b) The development of the negotiating skills of
Nigerians with a view to ensuring the acquisition of
the nest contractual terms and conditions by
Nigerian partners entering into any contract
agreement for the transfer of foreign technology.
c) The provision of a more efficient process for the
adoption of imported technology.
d) The registration of all existing and new contracts or
agreements having effect in Nigeria on the date of
the coming into force of this Act and the all contract
and agreements hereafter entered into the transfer
of foreign technology to Nigerian partners, and
without prejudice to the generality of the foregoing
every such contract or agreement shall be so
registrable of its purpose or interest is, in the opinion
of the National Office wholly or partially for or in
connection with any of the following purposes that is
to say”
i) The use of trade marks
ii) The right to use patent inventions
 iii) The supply of technical expertise in form of the
preparation of plans, diagrams, operating
manuals, or any other form of technical
assistance of any description whatsoever;
iv) The supply of basic or detailed engineering,
v) The provision of operating staff or managerial
assistance and the training of personnel and;
vi) The monitoring on a continuous basis, of
execution of any contract or agreement or
agreement registered pursuance to this Act.

From the functions listed above, we can summarize that

NOTAP was established with the objective of monitoring on a
continuous basis, the transfer of foreign technology to
Nigeria.10 It carries out these functions by examining the
quality of imported technology with a view to determining its
price and to check fairly obvious abuses (e.g. overpricing of
real, fake or obsolete technology, etc)
Overtime, the office has acquired considerable capability in
fulfilling its functions as the authority in charge of evaluating
and regulating the flow of technology into the country.12 This
predominating regulatory role of NOTAP became insufficient
vis-à-vis the changing needs of the country particularly at
the period when the Federal Government embarks on
National Economic Reconstruction.
3.3 NEW FUNCTIONS
In response to the new challenges resulting from the
dynamics of global technological advancement and in
accordance with the government policy of encouraging
foreign investment into Nigeria, NOTAP has since 1988
shifted its focus from regulatory and control activity to
promotional and development roles. The objective is to
attract foreign technology and investment, re-emphasize
local manpower development with a view to strengthening
local technological capabilities. The office therefore renders
the flowing additional promotional and development
functions:
Rendering technological advisory services to the public and
the private sectors of the economy.
Training of Nigerians entrepreneurs in all stages of the
development of technological capabilities,
Providing technology information.
Acting as patent attorney or patent agent to assist in
patenting indigenous innovations,
Creating awareness on the concept of Build-Operate-Transfer
(BOT) scheme and strategic alliances as alternative
mechanism for the acquisition of foreign technology and
investment profiles,
Undertaking techno-economic survey on industrial project
profiles, and
Organizing seminars and workshops on various issues
relating to technology acquisition and negotiating for the
public and the private sectors.

4.0 REGISTRATION
The Act makes it mandatory to register NOTAP
Not later than six (6) months every contract or agreement
which on the date of coming into force of the Act had been
entered into by any person in Nigeria and which still has
effect on the commencement of the Act in relation to any
matter referred to in section 4(d) of the Act.13
Not later than sixty (60) days from the execution or
conclusion thereof, every contract agreement entered into
by any person in Nigeria with another person in Nigeria with
another person in Nigeria with another person outside
Nigeria in relation to any matter referred to in section 4(1) of
the Act.

4.1 FORM
The Act provides that all applications for registration of
contracts or agreements subject to the Act shall be
addressed to the Director and shall be accompanied by such
member of Certified True Copies (CTCs) of
contract/agreements and with all other related documents
including annextures thereto and such other documents and
information as may be specified in any particular case by the
Director.14

4.02 PROCEDURE FOR REGISTRATION

The procedure for registration is as follows:
i) The recipient or transferee of the technology lodges
with NOTAP a duly completed NOTAP application
form (Revised Form NOTAP -84),
ii) The application must be accompanied with the
following documents:
a) An application fee of one hundred Naira (N100)
made out in bank draft payable to the Director of
NOTAP,
b) Memorandum and article of Association of the
company,
c) Two certified true copies of the agreement
registered,
d) Two copies of duly completed questionnaires (viz a

revised from NOTAP 2 – 84)

e) A copy of the relevant feasibility study; and
f) Annual audited account (if not new company) and
if it is a new company a copy of the certificate of
incorporation should submitted as evidence
thereof.
 iii) The NOTAP then securitizes the agreement in detail
and the body may request from the applicant more
relevant information
iv) When the agreement is finally approved by NOTAP
(either in its original form or in an amended form) a
registration free becomes payable to NOTAP.

4.03 CONTRACT NOT REGISTRABLE WITH NOTAP

The Act expressly sets out that the following contracts are
not registrable
Where its purpose is transfer of technology freely available
in Nigeria,
Where the price or other valuable consideration therefore is
not commensurate with the technology acquired or to be
acquired,
Where provisions are included therein which permit the
supplier to regulate or intervene directly or indirectly in the
administration of any undertaking belonging to the
transferee of the technology and are in his opinion,
unnecessary for the due implementation or execution of
such contract or agreement.
Where there is onerous or gratvitous obligation on the
transferee of the technology to assign the transferee or any
other person designated by the transferor patents, trade
marks, technical information, innovations or improvements
obtained by such transferee with no assistance from the
transferor or such person,
Where there is an obligation therein to acquire equipment
tools, part or raw materials exclusively from the transferor or
any other person or given source,
Where it is provided that the exportation of the transferee’s
products or services is prohibited or unreasonably restricted
or where there is an obligation in such transferee to the
products manufactured by it exclusively to the supplier of
the technology concerned any such contract or agreement
or any provisions thereof; and
Where limitations are imposed on technological research or
development by the transferee.

THE EFFECT OF REGISTRATION

Registration enables the agreement/contracts to be
enforceable and binding on parties especially with respect to
payment made in Nigeria to credit of any person outside
Nigeria.
Section 7 of the Act specifically states
“… No payment shall be made in Nigeria to the credit of
the Central Bank of Nigeria or any licensed Bank in Nigeria in
respect of any payment due under a contract or agreement
mentioned in this Act unless a certificate of registration
issued under the Act is presented by the party or parties
concerned together with a copy of the contract or agreement
certified by the National Office in that behalf.16

CANCELLATION OF REGISTRATION
The Director is vested with powers to cancel the certificate
of registration where he is satisfied that any contract or
agreement has subsequent to the registration thereof been
amended or modified in contravention of the provisions of
the Act. The Director is however obliged to give notice linting
to the parties concerned of his intention to cancel the
certificate.17 where the Director gives notice, the parties
concerned may have recourse to the provisions of the Act,
relating to appeals contained in section 9(1) – (4). It suffices
that the Directors’ judgment can be questioned if his
conclusion are faulted by the council and the parties
registration restored.

MISCALLANEOUS AND SUPPLEMENTARY PROVISIONS

The Act makes some supplementary and miscellaneous
provisions some of which are important and listed as follows:
a) Power to obtained information
b) Penalties for false returns and obstructions

5.00 CHALLENGES AND PROSPECTS

5.01 CHALLENGES
whether or not NOTAP has achieved the aim for its creation
can only be ascertained from how it has been discharging its
statutory responsibilities. A cursory look at some of the
challenges faced in the cause of its operation, may give one
an insight as to the inefficiency and ineffectiveness of the
body. Some of the challenges are here to wit:
In practical terms, it seems that NOTAP is primarily
concerned with the registration of contracts where the
fees payable are remittable in foreign currency. It has
been posited that no obligation to registration with
NOTAP may arise if the fees , related to the contract are
dominated in local currency without any intention to
remit same. In such circumstances, even if the
technology purported to be acquired is workless, no one
will be able to ascertain it as it will not be within the
ambit of NOTAP
Secondly, the quality of the staff of NOTAP is not specifically
stated in the Act. One is likely to assume that the staff
will be mainly administrative staff with no special
related skill or knowledge to appraise the contract that
come before them critically to understand their effect
on Nigeria. This handicap is shared with such other set
ups to the patents and Registry Act pursuant to the
patents and Deign Act 2004;
The criteria for evaluating applications brought before
NOTAP for registration appears cumbersome.18 It
 therefore follows that an efficient administrative
machinery must be put in place to ensure that
applications are considered with dispatch. It is
regrettable that the Act did not specify the time limit
that it will take NOTAP to process applications brought
before it as this would have served as a check against
dishonesty practices, laziness of administrative staff
and other bureaucratic bottlenecks that characterize
our public institutions;
It has also been argued that it might only be possible to
minimized disreputable conduct in the sale and
purchase of technology and not to eliminate it as
NOTAP seeks to do;
Finally, there seem not to be any obligation to register
technical or management agreements with NOTAP
where these agreements relate to projects funded in
the country by international finance institutions who
usually provide their foreign exchange components.19

5.2 PROSPECTS
The prospects associated with NOTAP can be viewed from
the perspective of benefits of imported technology. No doubt
that, these benefits are many and some of them are:-
a) Improving the growth of the national economy
b) Promoting employment especially in the skilled
categories,
 c) Reducing prices and improving quality of goods and
services,
d) Saving and earning foreign exchange,
e) Encouraging business competitiveness and innovation,

f) Improving scientific and technological capability of the

country, and
g) Generating more taxes and income for government.

6.00 RECOMMENDATIONS
a) The Act should be amended to bring all
contracts/agreements purporting to acquire technology
within the jurisdiction of NOTAP whether or not
payments under such agreements/contracts are
designated in foreign currency,
b) Special care should be taken to select professional staff
for NOTAP. The staff should have not only
administrative skills but the technical competence to
discern the effect of clause contained in the
agreement/contracts brought before them to
registration,
Contracts/agreements relating to international finance institutions
should also be registrable with NOTAP, to be able to
ascertain their technological worth to the nations.
d) There is therefore a need for NOTAP’s functions to be
performed efficiently and effectively. This will help
 inspire confidence in foreign investors and discourage
them from “cutting corners” in order to avoid
bureaucratic bottlenecks;
e) It is also suggested that the National Office of Industrial
Property Act.20 should be subject to frequent evaluation
to ensure that it is coping with our present date
requirement. This means that we should constantly
examine the operation of NOTAP and where areas are
found wanting, should corrected to keep the law
abreast with the changing world;
f) It is also suggested that zonal office should be
established all over the country to make their
operations more effective and efficient; and
g) The penalty of N2,000 is very meager that multi-
nationals could so easily pay. The amount must be
reviewed upwards.

CONCLUSION
Intellectual Property Rights clearly provides platform for
transfer of technology, but they do not by themselves
guarantee transfer of technology. For Nigeria to attain
technological threshold, i.e. posses requisite skill/capability,
have enabling domestic environment and posses adequate
support base. There is need to revisit Article 66 (2) of TRIPS
“Developed countries members shall provide incentives
to enterprise and institutions in their territories for
 purpose of promoting and encouraging technology
transfer to less- developed country members, in order
to enable them create a sound and viable technological
base”.21
In concrete summation, the origin of NOTAP from the
Enabling Legislation of 1979 has been vividly drawn into
focus. The rationale for the establishment of NOTAP, the
functions it was set out to perform and how all these of
functions have to be adjusted over time in response to new
challenges result from the dynamics of global technological
changes have all been treated. The power of NOTAP and
offences created under the Act, also came under close
scrutiny. Also requirements for technology acquisition are
bound to be imperfections. These criticisms regarding the
Act and the personnel that administer it was also
coordinated.
Finally, an attempt was made to proffer options and
recommendations which if implemented could assist NOTAP
in meeting aspirations of its
foundi2
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