Wednesday, 21 December 2011

Ghana: Government announces local content policy roadmap

The government's exact local content provisions and targets have been the cause of considerable debate, with a series of local content pronouncements being undermined by the lack of implementation of a defined policy.

At a recent Volta River Authority (VRA) organised forum on local content – which was attended by stakeholders including the Association of Ghana Industries – the Deputy Minister of Energy Emmanuel Kofi Armah-Buah claimed that parliament is focusing on the issue with the goal of finally implementing an official local content policy.

He claimed that, when implemented, the policy would have a number of goals, including:

increasing Ghanaian participation in the oil and gas sector to 90 per cent by 2020
the favouring of bids with higher local content over comparable bids with lower local content
priority purchasing of local products and services from Ghanaian businesses and providers even if their prices for comparable products or work were up to 10 per cent higher than that from foreign equivalents
the need to give first priority to Ghanaians when awarding contracts.
He also commended Kosmos, Tullow, and the VRA among others for their efforts to support "local content" to date.

This announcement comes the same week as another by the 13 member Public Interest and Accountability Committee (PIAC), which was inaugurated in September as specified by the 2011 Petroleum Revenue Management Act and includes the AGI, the Trades Union Congress, EITI and National House of Chiefs among others. PIAC pledged to monitor Ghana's oil industry closely, giving "a true account of the oil revenues to Parliament, the Executive and Ghanaians in general".

It also comes soon after comment by Dr Steve Manteaw of the Integrated Social Development Centre (ISODEC) who is also a leading member of the Civil Society Platform on Oil and Gas (CSPOG). He said that Ghana's small decline in Transparency International's global transparency ranking is partly due to the government's failure to ensure total transparency in oil contracts. He claimed that there is a perception of corruption possibly being increased because of the government's delays in passing of the Right to Information Bill and last year's dispute between the GNPC and Kosmos over oil exploration data.

For more news and expert analysis about Ghana, please see Ghana Politics & Security.

© 2011 Menas Associates

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