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Three African Local Content Policies to Learn From

Three African Local Content Policies to Learn From

Local content policies (LCPs) serve as a catalyst for growing the role of national companies and service providers in the energy sector.

African countries with well-crafted LCPs are witnessing increases in local participation, job creation and value retention, as well as the formation of local-international partnerships that can facilitate knowledge, skill and technology transfer. As Africa’s oil and gas frontiers see new discoveries, emerging markets can learn from more mature producers with existing local content frameworks, which offer valuable insights into the nuanced pathways toward sustainable energy development.

Angola Broadens Local Content Scope
Angola’s LCP was last amended in October 2020 through Presidential Decree No. 271/20, outlining requirements for the utilization of local goods and services and the development of the Angolan workforce. Importantly, the updated local content framework broadens its scope beyond the oil and gas sector, fostering fair competition among Angolan service companies and reducing the dominance of international players across sectors.

The policy has already yielded positive impacts in Angola’s growing mining sector. Earlier this month, global diamond giant De Beers signed an MOU with Angolan state-owned entities ENDIAMA, the National Agency of Mineral Resources, national diamond trading company Sodiam and the Geological Institute of Angola. Aimed at identifying opportunities to build local capacity and enhance sector benefits to the Angolan population, the partnership contributes to the growth of indigenous industries and aligns with Angola’s progressive policy framework.

Nigeria’s NCDMB Pioneers New Model
Nigeria adopted the Nigerian Oil and Gas Industry Content Development Act (2010), which requires operators to prioritize Nigerian products, services and employees, thereby promoting local content in the oil and gas sector. What sets the country’s LCP apart is the Nigerian Content Development and Monitoring Board (NCDMB), which oversees and implements the Act while forming strategic partnerships with leading industry players and educational institutions.
These partnerships have facilitated collaborations ranging from infrastructure development to STEM education initiatives. The NCDMB aims for a 70% local content boost by 2027, supported by initiatives like the Nigerian Content Intervention Fund, where one percent of each oil and gas contract contributes to local content development. This policy intervention model, established by the NCDMB, could serve as a blueprint for other African countries seeking to directly translate oil and gas revenues into local content development.

Senegal Establishes LCP Ahead of First Production
Senegal’s overhaul of its petroleum legislation – with the introduction of the Revised Petroleum Code in 2019 and subsequent amendments – reflects efforts to prioritize indigenous participation ahead of first oil and gas production. The country’s stand-alone Local Content Law has further enhanced regulations, entailing the submission of annual local content plans, prioritizing the hiring of Senegalese personnel, and requiring the use of a government-regulated electronic tender platform. Moreover, subcontractors are mandated to establish local subsidiaries and involve Senegalese investors in their shareholding.

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In conjunction with this legislation, the establishment of Senegal’s Local Content Development Fund and National Local Content Monitoring Committee (CNSCL) aims to bolster local capacity through training and support for SMEs, with the objective of achieving a 50% local content ratio by 2030. Committed to these decrees, the CNSCL signed an MOU with Nigeria’s NCDMB in February 2023 to enhance cooperation in the oil and gas sector. The agreement aims to strengthen capacity building, skill development and overall industry growth in both countries.

IOCs have responded to the call for enhanced local participation. In 2021 and 2022, Australia’s Woodside Energy conducted four capacity-building workshops on behalf of the National Technical Committee (NTC), aimed at deepening the NTC’s understanding of the oil and gas industry. These efforts not only contributed to building local knowledge, but also can serve as a model for public-private sector collaboration when it comes to developing frontier oil and gas markets.

Further Africa

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