The UCC-Ghana National Petroleum Corporation (GNPC) Professorial Chair of Petroleum Management, Prof. Omowumi O. Iledare, has noted that Ghana can achieve its local content policy goals for oil and gas industry if they are built on realistic expectations with already existing industrial competence and capabilities.
“Every oil-producing country is conscious of local content. The local content policy must have a goal and measurable objectives aimed at strengthening the demand of goods and services directed to the domestic market thereby expanding the local economy,” he added.
The UCC-GNPC Professorial Chair made these comments when he delivered a lecture on the topic “Imperatives of Local Content on a Petroleum Economy: Challenges & Strategic Options”
Global Standard for Local Content
Prof. Iledare noted that globally, local content was aimed at strengthening the demand for good and services directed to the domestic market and employment expansion. He indicated that long term goals should include diversification of the industrial sector, development of technology-intensive sectors and sustainable growth potential. He added that “efforts should be made to build relevant segments to enhance national security as well as expanding indigenous entrepreneurs and not traders or dealers”.
Attaining Growth in the Local Content
According to Prof. Iledare, growth in the local content could be attained if factors such as assets, funding, local capacity, and mutual interests were prioritised. He, therefore, urged the government not to pay attention only to the exploration and production of the value chain but ensure that local experts get jobs commensurate with their skills. “The upstream aspect cannot employ a lot of people so it is the subsidiary businesses that can do that,” he emphasised.
Long Term Benefit of Local Content Policy
Explaining the Long term benefit of local content policy, Prof. Iledare said it has the potential to stimulate inclusive economic and social development and prosperity. “Developing local content cannot be addressed in isolation, but must be aligned with other economic development policies. For instance, a policy in the oil and gas sector that does not align with adequate educational institution may not have the desired overall impact over the long term.
Lessons from Nigeria
Touching on essential lessons Ghana should learn from Nigeria, he said: “Nigeria’s economy is currently highly dependent on the capital intensive oil and gas sector but accounting for less than 12.5 percent of its GDP, on average, from 2011 to 2017”. The petroleum expert commended Ghana for apportioning part of the oil proceeds for infrastructural development. “Local content is not for making individual millionaires but for growing an economy. From what I’ve seen about oil, it is easier to make millionaires out of government policies than affecting change in the economy” he added. He reechoed the need for a policy drive for local content.
The UCC-GNPC Professorial Chair said local content should be hinged on technology, development and macroeconomics. He called for collaboration of all stakeholders across government and businesses to ensure the success of the policy. “Where business advocacy is the bedrock of local content policy, there exists a high chance of success, if driven by efficiency, sustainability and profitability,” he stressed.