ARTICLE

REGIONAL AND INTERNATIONAL EXPERTS WILL GATHER IN ACCRA, GHANA TO DISCUSS THE SUSTAINABILITY LOCAL CONTENT POLICY FRAMEWORKS IN AFRICA.

Introduction

After several years of natural resources exploitation with little development impact on the national economies, local content policy frameworks (LCFs) have recently been adopted by several African countries. The policy frameworks are seen as a mechanism to transform comparative advantages of natural resource extraction into long-term development. Local content development policies are, therefore, seen as a mechanism to transform comparative advantages of natural resource extraction into long-term development. It is understood to be a strategy that will enhance the contribution of the energy, oil and gas sector to the economic growth and welfare of the ordinary people. This is why African oil and gas producing countries are implementing local content policy frameworks that focus on economic diversification for national industrialization and inclusive economic growth.

This is the background for the upcoming gathering of regional and international oil and gas local content experts and professionals at Movenpick Ambassador Hotel, Accra, Ghana from 11th to 11th October 2019. The key objective of the conference is to brainstorm on the implementation of local content policies and their sustainability in African countries, drawing from international experiences.

The African Local Content (ALC) Conference is being put together by AMETRADE, a London based Africafocused event management and consulting company in collaboration with Ghana National Petroleum Company (GNPC) with the endorsement of the African Petroleum Producers Organisation (APPO). The Conference is an annual international pan African gathering for all Africa Oil producing countries and emerging producers such as Uganda, Senegal, Kenya, Mozambique etc. and it is coming to West Africa for the first time since its debut in 2016.

The third edition of the conference is coming to West Africa for the first time and Ghana is privileged to host this strategic regional event. The choice of Ghana was informed by the various policies and actions of the government to encourage local content development and participation of the citizens in the oil and gas value chain, since the country joined the ranks of African oil producers. The last two editions of ALC were held in Luanda, Angola in 2016 and 2017 and it attracted nearly 600 participants from around 30 countries. It featured technical site visits as well as best practice experiences from other emerging markets such as Malaysia. The event is an opportunity for the Ghana National Petroleum Corporation (GNPC), the host National Oil Company (NOC), to showcase the fact that it has achieved its mission to become a stand-alone operator by 2019.

 

Conference theme

Local content policy frameworks are seen as a means of diversifying the economies of oil and gas producing countries and promoting local economic linkages through their oil and gas resources exploitation. This is with a view to promoting employment generation, value addition and economic growth. With increase in globalization and protectionism, there is the need for African countries to leverage on their oil and gas resources to create development linkages for sustainable economic development through local content policies. The challenge, then, is how can local content policies and regulatory frameworks support sustainable employment generation, skills development and national industry participation in the African oil & gas producing countries?

The above concerns informed the theme of the ALC 2019 which is “Shaping the Future Through Sustainable Local Content Policies” and it will discuss the sustainability of the local content regulatory policies and institutional frameworks that have so far been implemented by African Oil and Gas Producing Countries to ensure local economic development through national industry participation. Drawing from international and national experiences in the implementation of local content policies and strategies, the conferences will proffer best practice solutions for a sustainable national industry participation and domestic value addition through local enterprise, contractor, and supplier value chain development.

It will also explore the strategies for developing a regional local content frameworks that can harness and leverage on the availability of oil and gas products, services, competences and experiences among countries in Africa to develop trade and commerce between them. This is to enable emerging and prospective producers benefit from the experiences of countries like Angola and Nigeria that have a developed local content infrastructures and institutions.

During the conference, the following question will be specifically be raised, and answers provided: What are the distortions caused by local content requirements from both the government and supplier perspectives. What can be done to mitigate these risks? What can be done to ensure local content policies and programs are providing workers with the skills they need to succeed? Issues in delivering on local content from the perspective of international, regional, and domestic suppliers. What does and doesn’t work to elicit the good behavior? What aspects of local content deliver the most value and how do we measure this? What data and market intelligence are needed?

 

Resource Persons

ALC 2019 will gather government representatives, policy makers, international and national oil companies, E&P companies, services providers and decision makers. The conference will be officially opened by the Ghana Minister of Energy who endorsed its organisation in the country. Keynote remarks will be presented by top level government officials of the Ministry as well as Chief Executive Officers of the Ghana National Petroleum Company and the Ghana Petroleum Commission. It is also expected that key regional and international energy, oil and gas stakeholders would be represented at the conference which will also feature exhibitions of local content products and services. Resource persons from national, regional and international energy, oil and gas organisations have been assembled to discuss the various sub-themes developed for the conference. Top level Executives from the United Nations Conference on Trade and Development (UNCTAD), Organisation for Economic Cooperation and Development (OECD) and from Brazil, Mexico and Norway will bring international perspectives and experiences to the sustainability of local content policies for the benefit of African policy makers and other stakeholders including national oil companies, international oil and gas companies, independent oil companies, oil and gas trade associations and service providers.

 

Conclusion

Africa’s share of global oil production hovers around less than 10% of global output despite new discoveries in recent times. Proven oil reserves on the continent are estimated to be about 8% of the global total. This can be explained by reduced exploration and appraisal activity with recent downturn in the global oil prices. Despite this, Africa boasts eight of the top-20 discoveries in 2015 and 9 out of the top 20 discoveries in 2016 regardless of the fact that average discovery sizes are on the decline worldwide.

As observed by PwC (2016) report on developments in Africa oil and gas industry, “ensuring a sustainable development of the industry in the future is increasingly challenging in a more complex global market, and the longer-term backdrop has changed”. There therefore the need to discuss the strategies for ensuring the sustainability of the oil and gas industry in the existing and emerging African producers.

The prime objective of the conference is to provide an avenue for all stakeholders to network and share experience in the implementation of local content policies and the challenges encountered with a view to fine-tuning the policies and institutional frameworks for better impact on the national economies. It is also designed to be a learning and capacity building platform for stakeholders and policy makers to draw from international experiences and best practices in the implementation of local content policy frameworks.

At the end of the conference, a report is generated and made available to the relevant institutions for information on the key conclusions and recommendations on the key issues discussed. The conclusions and recommendations of the past editions were sent to the producing countries for their information and action. The feedback is that it has contributed to improving the impact of local content policies on the national economies.

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