Government has been urged to strengthen its local content policies to facilitate expansion of the oil and gas and industrial sectors for a sustainable national economy.
Professor Omowumi Iledare, the Ghana National Petroleum Commission (GNPC) Professional Chair of Petroleum Economics at the Institute for Oil and Gas Studies at the University of Cape Coast (UCC) gave this advice.
According to him, local content must translate to cost-competitiveness, technical competence, and be a tool for industrial development and domestication for value addition and creation without compromising on standards.
Prof. Iledare, an International Petroleum Economics Expert, gave the advice when he delivered a public lecture on the theme ‘Local content imperative for sustainable petroleum economy: Challenges and strategic options for Ghana’, at the UCC on Tuesday.
Dwelling on the success of Nigeria’se local content initiative – especially in the oil and gas sector, he said Ghana’s local content must hinge on technology, human development and microeconomics issues.
He emphasised that it is imperative to expand the industrial sector, especially petroleum activities, to maximise the sector’s contribution to the economy beyond transfer payment and income redistribution.
A good local content policy, he said, should encourage the use of domestically produced goods and services required for local industry activities, and local manpower for research, training and contractual services.
Prof. Iledare noted that petroleum host countries typically introduce local content policies to facilitate and promote participation of privately owned and state-owned domestic oil companies in petroleum resource development.
“Developing local content is one of the methods well-resourced countries have adopted to increase the benefits from resource extraction to their economies, beyond securing optimal revenues,” he said.
He encouraged government to ensure a stable economic and political atmosphere, and sustain long-term strategic partnership with various Oil Marketing Companies (OMC) to grow the sector.
Prof. Iledare pleaded for government assistance to, especially, local investors when they have the zeal to establish or set up businesses in the country.
He further urged government to duly reward foreign investors who inject their resources into the industrial sector, especially those in petroleum activities – pointing out that investors expected maximum returns on their investments.
Prof. Iledare said there should be transparency and accountability on investments to meet expectations of the citizenry.
He further called for the right investment of oil resources into social infrastructure, improved services delivery, and strategic investments which significantly improve the livelihoods of the citizenry.
He said diversification of the industrial sector, building relevant segments to enhance national security, and expanding indigenous entrepreneurs should be the long-term goals of local government.
Prof. Iledare said collaborative efforts are required from all stakeholders in the industry, ranging from government to local investors, to achieve sustainable economic development impacts.