Challenges Facing the Implementation of Local Content Policy Framework in Ghana
Challenges Facing the Implementation of Local Content in Ghana Oil and Gas Industry
By Gilbert Azaah
This article looks at the problems being faced by Ghana in implementing local content and local participation as a developing country with limited capacities and also dealing with IOCs and sub-contractors which are well established and are well connected globally.
As a developing country with very little experience in the oil and gas industry, one of the main obstacles faced by the implementation of the local content policy in Ghana is the lack of local capacity and capabilities in virtually all sectors of the oil and gas industry. These short comings would obviously affect Ghana’s hopes of taking advantage of the numerous employment opportunities in the industry and also make it difficult for local businesses to be able to provide goods and services which are competitive in terms of “price, quality and timely availability” as stipulated in the policy framework.
One of these challenges is the fact that local businesses servicing the oil and gas industry require a sound capital base because of the capital intensive nature of the industry. However, many Ghanaian companies may not be in the position to afford this and the only way out is to source funding from banks which could affect the quality and efficiency of goods and services provided. Another option is to partner foreign companies to boost their financial capabilities but this will in a way defeat the purpose of the policy itself which seeks to encourage indigenous businesses to take up the challenge of providing goods and services for the oil and gas industry.
Another major obstacle in the realization of the local content policy in Ghana and many other countries is the fact that these IOCs have well established supply chain networks. They therefore prefer to deal with global suppliers or award major service contracts to specialist firms such as Worley Parsons, KBR Aker Solution, Amec and
By Gilbert Azaah
This article looks at the problems being faced by Ghana in implementing local content and local participation as a developing country with limited capacities and also dealing with IOCs and sub-contractors which are well established and are well connected globally.
As a developing country with very little experience in the oil and gas industry, one of the main obstacles faced by the implementation of the local content policy in Ghana is the lack of local capacity and capabilities in virtually all sectors of the oil and gas industry. These short comings would obviously affect Ghana’s hopes of taking advantage of the numerous employment opportunities in the industry and also make it difficult for local businesses to be able to provide goods and services which are competitive in terms of “price, quality and timely availability” as stipulated in the policy framework.
One of these challenges is the fact that local businesses servicing the oil and gas industry require a sound capital base because of the capital intensive nature of the industry. However, many Ghanaian companies may not be in the position to afford this and the only way out is to source funding from banks which could affect the quality and efficiency of goods and services provided. Another option is to partner foreign companies to boost their financial capabilities but this will in a way defeat the purpose of the policy itself which seeks to encourage indigenous businesses to take up the challenge of providing goods and services for the oil and gas industry.
Another major obstacle in the realization of the local content policy in Ghana and many other countries is the fact that these IOCs have well established supply chain networks. They therefore prefer to deal with global suppliers or award major service contracts to specialist firms such as Worley Parsons, KBR Aker Solution, Amec and