The African Chamber of Energy held its first meeting with the Local Content Committee, focusing on the creation of local content. The petroleum sector supports many of Africa’s economies with many existing markets like Nigeria or Angola and emerging oil markets such as Senegal or Uganda. As a consequence, African local content has become a priority for governments , regulators and stakeholders in the industry.
Issues surrounding the nature of local content expectations and comprehension were the key topics for discussion. Key points included the need for African governments and businesses to further enforce the policies on local content and to develop new approaches to the goal of entrepreneurship and capacity building. From funding to the development of an encouraging business climate for African startups, SMEs and businesses, it was decided that African governments and regulators should take on this challenge and provide better conditions and environments for successful African entrepreneurs. A group of strong local energy companies across the value chain, and in particular in the upstream, still lack existing African energy markets such as Congo Brazzaville, Equatorial Guinea or Gabon. Despite oil and gas production for decades, their environment has until now been detrimental to the development of oil and gas entrepreneurs, particularly in view of the lack of domestic funding.
African content regionalization was described as a significant short- and medium-term development. With the growth of African Continental Free Trade Area (AfCTFA), the opportunity to exclude local content from a pure international / local viewpoint is real in many of the African markets.
This is particularly an opportunity for local companies in developed markets, whether it’s Nigerian oil and gas content regionalisation or South African and Kenya renewable energy content regionalisation. African companies have the means and ability to build and take advantage of regional enterprises and alliances that will carry the production of African content to a new stage.
Finally, workforce inclusion will become a significant focal point for the Chamber and its Committee, especially in order to encourage inclusion of youth and women in the extractive industries. A sustainable African energy industry can only be as resilient as it is inclusive and better frameworks and policies must be enforced to ensure good careers in the sector for African women and youth.
Next producers such as Senegal, Mozambique or Uganda have a unique chance to genuinely innovate in their own approach to building capacity and creating local content.
Related
As the Covid-19 pandemic continues to increase the need to locate the value chains in Africa, local content creation is increasingly relevant for all stakeholders in the industry. Its success will ultimately rely on supporting African entrepreneurs who are able to raise capital and engage in successful business with the right partners in the region. Cooperation with foreign corporations, and in particular with African organisations, will be critical on this journey.
Data Source: African Energy Chamber