Local Content Should Be a Complimentary Tool for Development-PEF Director-General

The Private Enterprise Foundation (PEF) – a centre for advocacy and promotion of the private sector, has stated emphatically that local content issues should be pursued as a complimentary tool to ensure that Ghanaians benefit in every aspect of the country’s oil and gas sector and not as a tool that may cripple businesses. According to the Director-General of PEF, Nana Osei-Bonsu, “As much as the group supports and appreciates the local content initiatives, it should not serve as a tool to prohibit businesses from being efficient and profitable.” He explained that oil and gas is a serious international business that requires to be run in an efficient manner to be economically viable and not as benevolent situation that one can use local content to bring mediocrity and unskilled labour force to participate in the industry. Another issue that PEF was vociferous about was the issue of standardization and certifying of Ghanaians for the oil and gas industry. The group opined that there is no reason to reinvent the wheel when it comes to this issue. The applicable standards that are in conformity with international standards taking into local norms should be maintained. The certification should be processed locally and not externally once the authority for local certification can be obtained. Currently, the standard the whole world operates on is the American Petroleum Institute (API) Standards. The absence of standardization is one major excuse that has been used to sideline many Ghanaians from gainfully participating in the country’s burgeoning oil and gas industry since its inception. Dr Steve Manteaw, Campaigns Coordinator of ISODEC, and also Chairman of the Civil Society Platform on Oil and Gas stressed that it is important and necessary for Ghana to take steps to develop its own standards. According to him, “A country that has substantial resources of oil and gas and is in the process of developing it industry should think through and develop their own national standards that must meet or is in consistence with global petroleum standards. For example a Ghanaians wanting to work in the industry do not have to be certified in America. The time and cost alone becomes a barrier to such persons. The oil and gas industry players in Ghana, including Tullow partners, the Ghana Standards Board, the National Accreditation Board and any relevant institution, can work together to develop a system of certifying according to agreed or required standards for technicians and skilled men.” But PEF advised that “We cannot develop our own standards different from the acceptable global standards and expect the rest of the world to comply with it. There are global standards applicable to every industry and the oil and gas industry in Ghana is no exception and therefore we must adhere to the internationally accepted standards. We have to do things that are applicable in most part of the world and not only to us,” said Mr. Nana Osei-Bonsu. He insisted that Ghanaians need to train and develop their skills and technical expertise in order to take full advantage of the opportunities provided by the industry. The PEF Director General further opined that Ghanaians were not put in their current geographical location by mistake or accident and therefore the country’s nascent oil and gas industry is part of their heritage and as such as beneficiaries and patrons of the heritage they have to benefit from it. “First and foremost this is Ghana and anything being done in this country should be done with Ghana and Ghanaians as the utmost beneficiaries. Now the question is how do we benefit from this industry? Is it by being a partner of the industry, a service provider, an employee, or the use of our local raw materials? if we do not have the money to run the industry ourselves we have to be able to find a way to buy into it through partial ownership, whether it is a limited partnership or quasi partnership, but whatever the case may be, we need to own some of the action. If we do not own some, then we are just rent seekers and the majority of the revenue accrued from the industry goes to the outside owners,” he pointed out. PEF admits that the oil and gas industry in Ghana is still in its infant stages trying to find the best processes and procedures to be able to do what is needed. Therefore it is yet time for the entire economy to realize the impacts of the numerous opportunities that can be generated if the right polices for diversification are pursued. The group is advocating for the diversification of the Ghanaian economy at the back of the oil and gas industry to impact positively on the entire economy, instead of leaving it to stand alone. “Oil and gas should not lead to the linear type of economic development; it has to be able to impact on everything else. There must be a fund coming from the oil and gas industry that can be set up as a cushion to develop Small and Medium Enterprises. There must also be a rule of engagement where investments of the oil and gas industry are put into a long term development instruments that can also benefit other sectors of the economy,” he added. Already, the government of Ghana, as part of the measures to promote local content and participation in the petroleum industry, intends to establish an Enterprise Development Centre (EDC) with support from the Jubilee Partners this year. The centre will be located in the Western Region to facilitate the training of Small and Medium Enterprises to be properly positioned to take advantage of the oil and gas industry. Although industry analysts say the Ghanaian oil and gas industry holds numerous potentials, the business community is yet to identify those potentials and take full advantage. The group indicated that though their members are always strategically placed and ready to take full advantage of any situation, the opportunities from the oil and gas industry are still evolving. They explained that “businesses do not capitalize or set up for tomorrow because it is going to be the potential; they are only set up when they have identified the exact opportunities and equip themselves to take advantage of those opportunities,” Nana Osei-Bonsu stated. PEF strongly kicks against Ghanaian businesses fronting for foreigners, calling on the appropriate authorities to prosecute all offenders. “It is criminal to impersonate and therefore there should be criminal prosecution of people caught doing that and should be subjected to severe penalties including back taxes on the fronting party. Another way of addressing this issue is not to recognize the ownership of the second party because the licensing was not acquired in their name any way,” he suggested.