A Comparative Analysis of Local Content Policies in the North Sea and the Gulf of Guinea Regions

Abstract

Most resource-rich countries in Africa are introducing or reinforcing Local Content Policies (LCPs) and regulations to propel socio-economic development since its introduction in the North Sea. Local content is now a prerequisite for granting exploration license to international oil companies (IOCs) and suppliers in the Gulf of Guinea region (GGR). The paper analyses and compares LCPs - successes and impediments factors - from two perspectives: the North Sea – Norway, UK, and Denmark; and the Gulf of Guinea – Angola, Nigeria, Ghana, Liberia and Equatorial Guinea to glean policy lessons for the Gulf of Guinea countries. The study of the comparator countries found that the policy implementation in the GGR is constrained, inter alia by inadequate infrastructure, industrial base and supplier base, technical and financial capacity of domestic firms and weak regulatory institutions. Also, the LC policy is overly ambitious and prescriptive which ignores the GGR’s state of industrial development. To engineer resource-based development in the GGR these countries must move beyond its preoccupation with local content regulations to addressing the above challenges conducive for the development of linkages.