Local Content in Africa: Oil Lessons for the Future

LAGOS (Capital Markets in Africa) – If any two words have dominated the debate about oil and gas in Africa over the last few years, they have been “local content”. The term encapsulates the idea that oil revenue can be used to develop the wider economy by making it local. The term has until recently been narrowly coined in reference to the nationalisation of industry, but more recently it has been used in the wider pan-African sense of driving not only national interests, but regional and continent-wide interests more generally, before extending opportunities to international actors. This is a welcome development.

African nations would do well to incorporate this approach into their own local content regulations, a consequence of which is likely to be increased intra-African trade and co-operation. After all, despite decades of continued oil and gas exploration and production, it is generally understood that some of Africa’s wealthier oil producers have failed to not only integrate their own people in this dominant industry, but also to provide their general population with a better standard of living. The reasons for these failures are multiple: lack of infrastructure, lack of trained personnel, ill-designed policies, corruption, Western bias against local companies, etc.

Solutions to these problems have been deployed, with higher and lower degrees of success. However, after sixty years of oil and gas industry in Nigeria, for instance, the debate on local content continues, with the most common conclusion being that not enough is being done to make the industry more native and beneficial to local citizens.

An extract from Bouncing Back: African Oil and Gas. Please download by clicking: INTO AFRICA PUBLICATION: MAY 2018 EDITION.

Contributor’s Profile
NJ Ayuk JD/MBA is a leading energy lawyer and a strong advocate for African entrepreneurs, he is recognised as one of the foremost figures in African business today. A Global Shaper with the World Economic Forum, one of Forbes’ Top 10 Most Influential Men in Africa in 2015, and a well-known dealmaker in the petroleum and power sectors. He is the author of “Big Barrels” Africa Oil and Gas and Its quest to prosperity. He is the founder and CEO of Centurion Law Group and the Africa Energy Chamber of Commerce.