Oil & Gas: Local Content is a Great Tool for Developing Domestic Economies and Championing Industrialization – Experts

At the gathering of the 4th Africa Oil Governance Summit in Accra on November 13 and 14, 2018, it was concluded that local content is a great tool for developing domestic economies, promoting local work force and championing industrialization and regional integration of the African continent, this is according to a communiqué issued at the end of the event.

The reality, it said, depends on the extent of preparations by African countries for a well effective implementation, monitoring and evaluation of local content efforts at the national, sub-regional and regional levels.

Challenges of local content achievements according to the communiqué were also widely discussed. It came to light that low capacity levels of local human resources and businesses; under-representation of women and Persons With Disability in accessing local content opportunities; ownership syndrome and culture of business where businesses want to go solo instead of building partnerships to create economies of scale; limited access to finance; difficulty in integrating the oil and gas industry through local content requirements and poor coordination among countries to achieve industrialization and regional integration.

Local content, the communiqué stated is a shared responsibility and requires a partnership approach to achieve shared benefits for all. To address these, it said, there are specific roles governments, regulatory bodies, the business community and civil society organizations can play to drive the localization agenda.

On the role of Government, the communiqué said African governments must established a balance between local content targets, the industry’s survival and growth of linked economic sectors through creative government interventions such as proactive and continuous investment in human resource development including building the competencies of women and Persons With Disability in science, technology, engineering and mathematics education.

Government, it also said, must provide key infrastructure to drive localization as well as consciously restraining from interference with powers and decisions of regulatory bodies. Governments, the communiqué indicated must spend time and money to train the supervisors of the local content requirements to ensure compliance.

It said coordinating, harmonizing and aligning local content efforts and policies across all sectors including the oil and gas sector to ensure that they are not counterproductive to each other. The communiqué said there was the need to build long-term industrialization strategies that outlived political cycles.

Understanding each State’s comparative advantage and harmonizing local content policies at the sub-regional and regional levels according to the communiqué was necessary to achieve shared benefits.   

With regards to the role of regulatory bodies, it said, regulators must be effective in monitoring of local content requirements. This, the communiqué stated, requires that they are effective, competent and independent to properly evaluate local content implementation.

Regulatory bodies, it said, must coordinate effectively with other State institutions to jointly undertake timely cost audits. The approach to local content by regulatory bodies according to the communiqué must be non-partisan to ensure continuity of implementation.

Source: Adovor Nutifafa

dovor100@gmail.com

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