1.1 What Is Local Content?
Developing Sub-Saharan African countries have been the supplying hydrocarbons for over thirty years. Most of Sub-Saharan Africa has, incorporated standards for ā
local contentā into the regulatory system regulating the production of natural resources. The goal is to create employment opportunities, facilitate the growth of businesses and acquire new skills and technologies.
1 Achieving such objectives weighs on the investor with increased costs and poses a threat for further investment. For example, oil and gas companies can face nationalistic demands that are unreasonable or deadlines from host governments or communities seeking fast outcomes; rewards come from long-term strategies focused on helping to grow local businesses and employees. Given the value of
local content, several companies consider the idea a strategic one that can directly influence a variety of core business functions, including market growth, acquisition and operations.
2 Besides, investors have begun developing creative technologies and methods to meet the requirements of local content and contribute to sustainable economic development.
Local content is the added value brought to a host nation (and regional and local areas in that country) through the activities of the oil and gas industry. This may be measured (by project, affiliate, and/or country aggregate) and undertaken through workforce and local supplier development.3
Local content emphasises on value addition, or what is known as in country value addition that develops other sectors of the economy. The competing interests of regional and/or local areas that are host communities of oil and gas resources have brought about major debates. That we clarify using justice as an analytical framework for local content implementation. The fundamental principle behind adopting a local content policy is cracking through the enclave of the oil and gas sector by developing the local population. Little is being mentioned on what metric is most suitable for developing, growing nascent oil and gas producers, such as Liberia, Tanzania, Kenya, Uganda and Mozambique. Local content has been pivotal in transforming oil and gas resources into drivers of economic prosperity.
1.2 Why Is Local Content Important?
Regardless of boom and bust cycles, market fluctuations, uncertain pandemic outbreaks such as COVID-19 and other factors, the many new oil and gas producers in Africa will take advantage of these policyās potential benefit and relevance for strategies to offer resource-rich developed countries petro-development.4 While local content policies are only one component of a more holistic natural resource-based development system, they are extremely significant. For local content to thrive where previous efforts of resource nationalism have failed, actors writing, advising, controlling and implementing these policies must learn from the shortcomings of those earlier policies. Both modern and old local content strategies need to be updated to resolve crucial issues surrounding the meaning and evaluation of local content.5 While those creating newer local content policies need to continue to pursue a balance between strict regulation and promoting investment to ensure the best possible outcome.6 Financial capital and local leaders must also align their interests with the needs of ordinary people as well as societies that host oil and gas operations. Host governments and international oil companies must connect local content to governance, anti-corruption policies and meaningful transparency by all partiesāwhile donor agencies and international institutions may assist them. Local content policies can be transformative, with the right synergy with other policies and participation of all stakeholders. Development policies-based solely on oil rents have, in every case disappointed Sub-Saharan Africa. However, local content provides new opportunities to make oil and gas work for twenty-first-century African production.
1.3 Channels of Local Content Policies
Local content policies are found in policy statements, legislation, oil and gas contracts and legislation. But local content policies can only be implemented through three channels, namely national, regional and local channels of implementation, in Sub-Saharan Africa leading local content regimes in Nigeria and Angola.7 Have adopted the national content policy; of local content implementation. New oil and gas producers like Mozambique, Tanzania, Kenya, Uganda and Liberia have also followed suit. Without an in-depth analysis of what would work for their circumstances. We advocate for the implementation of the regional content policy. The regional channel of implementation seems more viable for nascent oil and gas producers. Currently, the global oil and gas industry has faced the ramifications of the COVID-19 pandemic and the oil price shocks of 2020. These challenges have disrupted global value chains and investments in the oil and gas industry. Several countries have signed the Paris Agreement, gearing the wheels of the energy transition. Global consumers of fossil fuels moving to cleaner sources of energy with strict time-lines of 2030, 2040, 2050, etc. Sub-Saharan new oil and gas new participants do not have the luxury of time to develop the skills, capital, absorptive capacity, and technology transfer, as well as an adequate supplier base to crack through the enclave and integrate the oil and gas industry. Through regional integration countries in the Gulf of Guinea, in East Africa, in Southern Africa can pool resources, create clusters, develop regional training facilities and provide regional financing mechanisms that can facilitate local integration into the oil and gas value chain with massive linkages to other regional sectors of the economy.
1.4 Purpose of the Book
Since the African nationalisation wave of the 1980s, Sub-Saharan Africa has struggled to transform our vast natural resources into vehicles of economic development. Several studies have been undertaken explaining the paradox of plenty, trying to assess as to why Sub-Saharan Africa a rich region, with a growing young population is still deep into poverty. Several countries adopted the āone-size fits allā approach addressing this challenge in Sub-Saharan Africa. Without considering the pre-existing circumstances to make these āsolutionsā and policy options thrive in our continent. This book offers novel ideas as to how policies such as the local content policy can be adopted and implemented in Sub-Saharan Africa and avail real solutions to local integration in the oil and gas industry. The use of regional integration as a problem-solving tool has been used in Sub-Saharan Africa in issues of politics, economics, and trade but not specifically in the oil and gas industry. Making it easy for multinational oil and gas companies have higher bargaining power in Sub-Saharan Africa. The oil and gas industry in Sub-Saharan Africa has brought about corruption, income inequality and built an indigenous capitalist elite class. The growing inequality, lack of transparency and negative impact of the oil and gas industry in Sub-Saharan Africa motivate the research done in this book to merge local content policies and energy justice. Having the right procedures, recognising marginalised communities, ensuring equitable distribution of the benefits and ills of the oil and gas operations with the right time and location.
1.5 Methodology
This book analyzes the adoption and implementation of local content regimes in Sub-Saharan African oil and gas countries. It is essentially an examination of how developing nations and developed nations have approached, or are likely to approach the process under which local content policies have been implemented. This study is doctrinal research (with certain non-doctrinal elements) that utilises the comparative case study methodology. Kaarbo and Beasley define comparative analysis as āthe systematic comparison of two or more data points (ācasesā) obtained through use of the case study methodā.8 They also confirm that case studies can be both qualitative as well as narrative, and do not necessarily need to rely on multiple sources of evidence to function. The functionalism in comparative law places emphasis not only on legal systems and rules but as well as the effects of the legal systems.9. The function of local content policy will be evaluated based on their functionality in the local host community of the energy resources. This book aims to unify different legal frameworks and create a new policy that can be applied in any oil and gas region, especially in regions that are struggling to crack through the oil and gas industry enclave. The analysis will examine whether the new preferable policy, institution, theory or result could work equally well in another oil and gas regions given the same circumstances. The selection process of the countries was based on the similarities of the countries. The similarities between the Sub-Saharan African countries such as Liberia, Kenya, Angola, Equatorial Guinea, Nigeria, Mozambique, Tanzania and Uganda are the following: all members of the same international agreements, namely the East African Treaty, the Economic Community of West African States, the African Continental Free Trade Area, The General Agreement on Tariff and Trade (GATT), etc. These countries have all adopted and implemented the same typology of local content policy, namely the national content policy, with similar political background and are semi-democratic countries. The enquiry and comparative method employed will examine the micro and macro comparison aspects in adopting local content policies.10 Hence the unification of local content requirements between the Sub-Saharan African countries will look at the economic, social, political and cultural factors in which legal rules are embedded beyond other societal preferences when implementing such production development policies.
The analysis done under a comparative enquiry is useful for observing the gaps in the adoption and implementation process of local content policies. The gap can be found not only in the adoption and the implementation process. But also in the fact that the adopted polici...
