Africa: Would it prevent local content policy of the oil curse?

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Society & You - Social Critic
Wednesday, 09 May 2012 19:22

This post is part of our special coverage of International Relations and Security [en].

In recent years, large oil reserves have been discovered in various parts of Africa. If this "black gold" is an opportunity for economic growth, the fear that the boom may not benefit local people - and maybe even become a curse - is shared by citizens Sub-Saharan Africans and experts [on] by equal.

In 2009, Nana Adjoa Hackman [in] of Modern Ghana [in] suggested a possible solution:

It is common practice for countries oil and gas producers negotiate local content with international oil companies interested in an attempt to ensure the country a greater share of the value of oil and gas projects. This trend has arisen due to the knowledge of the poor economic performance of many resource-rich countries despite their enormous wealth.

Tullow oil camp, Uganda. Image by Conservation Concepts on Flickr (CC BY 2.0).

Tullow Oil Field, Uganda. Conservation Concepts image on Flickr (CC BY 2.0).

Taking the example of Ghana, said:

As part of measures taken to implement the framework of oil and gas production in Ghana, a bill authorizing the Petroleum Regulatory Authority of Ghana (GPRA), the bill was published in October 2008. (...) Sections 100 to 105, inclusive, of the project have to do with the promotion of local content, in particular, the involvement of the state oil company, the provision of goods and services from local businesses and employment and training of citizens of Ghana.

The adoption of the policy framework of local content in Ghana continued in 2010 [in], however, is still pending approval [in] parliament. The latter is now more urgent than ever, because job hunting is a concern for a growing number of citizens of Ghana.

Commenting on an article entitled ' The elusive youth angry by the oil industry jobs '[in], Christiane Badgley writes [es]:

Oil has huge amounts of money, of course, and along with that, the expectations of many well-paying jobs. The problem is that the industry - at least as it exists in Ghana now - does not generate a lot of work. (...) We'll have to wait for details on how the government intends to increase the content and local participation, which is easier said than done. Training, education, fees, regulations, penalties, taxes, incentives - the government has many options to address the issue.

In Uganda is doing the same movement towards the adoption of a local content policy, as explained on the website In2EastAfrica [in]:

Uganda wants a strong local content in the emerging oil and gas industry for its citizens to provide skilled labor and a competitive offer. This is in an attempt to ensure the dissemination of revenue down, avoiding the resource curse.

In fact, avoiding the curse of oil is important for Uganda, especially if it helps prevent the appearance of other characters such as Joseph Kony . After all, oil was discovered in the northwest, near the border with the Democratic Republic of Congo, the epicenter of the 30-year conflict led by the head of the Lord's Resistance Army. It is expected that local content policy creates jobs for local people and out of the way of war.

In the case of Kenya, where oil was found earlier this year , the Local Development Network of Africa [in] question on Twitter:

@ Ledna : How far gone in # Ghana 's discussion of "local content" for the oil and gas sector? # Kenya (just found oil) could learn from that

Günther Schulze, professor of economics at the University of Freiburg, Germany, adds another perspective on the World Bank's blog [es]:

The oldest, but most important challenge is to build and maintain good institutions. (...) Transparency is the most powerful lever for accountability. If Kenyans know exactly how much oil is being produced, how much they pay in royalties the oil companies, this would already be a big step in the right direction. (...) The strong civil society and the creative industries in Kenya, especially ICT, can play an important role in controlling the flow of oil revenues and propose solutions about how to spend money well. Then the resource curse can be turned into a blessing.

ISN logo This post and its translations into Spanish, Arabic and French have been commissioned by the International Security Network (ISN) as part of an alliance to locate voices of citizens around the world on issues of international relations and security.

Visit the blog of ISN [on] and see more related stories.

Written by Julie Owono · Translated by Juan Arellano · View original post [en] · Comments (0)
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