A Survey of the Literature on Local Content Policies in the Oil and Gas Industry in East Africa
28 Pages Posted: 21 Apr 2016 Last revised: 22 Apr 2016
Date Written: April 13, 2016
Although oil and gas exploration has been going on in East Africa for decades, until recently exploration activities grew more slowly compared to other regions in Africa. Today, there has been a series of oil and gas discoveries in several East African countries, including Kenya, Madagascar, Mozambique, Tanzania and Uganda. Debate is however mounting over what effect the new oil and gas discoveries would have on East Africa, given the trajectory of older oil-producing countries in Africa, particularly Angola, Nigeria and Sudan. The challenge for East Africa is, therefore, how to maximize the potential benefits from the resources to avoid the under-developmental path that these other countries followed. There is a strong case for emerging oil and gas-producing East African countries to consider adopting the local content policy (LCP). The nascent nature of the oil and gas industry in the region means that these countries would not have the technical and even managerial expertise to meet the demands of the industry. And training and education are essential for economic development. The LCP appears to be a potent tool to train local professionals. The question however is how to design the policy to reflect the particular needs and circumstances of each country. This paper reviews the literature on the pros and cons of the LCP as well as the various LCP options available with a view to making suggestions that East African countries may consider as they join the ranks of oil and gas producing countries.
Keywords: Local content policy, Local, Regional content, East Africa
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