Are Local players seeing benefits in Ghana’s oil and gas sector?

Since the production of oil started in Ghana there have been several arguments and disagreement as to whether local players are gainfully and successfully participating in the industry. While international oil companies have alleged engaging thousands of Ghanaians directly and indirectly, Civil Society groups thinks otherwise. According to the Civil Society groups a lot of Ghanaian companies have not been able to obtain any real opportunities worth talking about in the industry. They claimed that opportunities for local players in the industry in Ghana are none existing. Answering questions on local participation by Ghanaian in the oil and gas industry in Ghana at the just ended 4th Ghana Summit, Dr Steve Manteaw, Chairman Civil Society Platform on Oil and Gas and Vice Chairman, Ghana EITI Steering Committee, emphasized that “Most of the Ghanaian companies are still struggling, with a lot of them who have registered with the GNPC not getting the opportunities they anticipated. They are left to fend for themselves.” He said for Civil Society groups government has to take another look at its local content targets and also review the hefty registration fees being charged by the Petroleum Commission. However in his presentation on strengthening local content through collaboration, Willy H Olsen Senior Advisor INTSOK and Senior Associate at the CWC Group, said oil discovery has created more than 1500 jobs with 60% being Ghanaians. He maintained that the gradual growth of the industry has led to the migration of diaspora professionals to fill in various positions. Many of the Oil companies are now well established in the country with major oil and gas services players like MODEC, TECHNIP, AKER Solutions, FMC Technologies, Subsea 7, Schlumberger, Transocean, Baker Hughes, Expro, and Tenaris locating in Ghana. To him, “Maximizing the benefits of local content is not the same as to maximize local content” Touching on the lack of local participation in the oil and gas sector, especially the upstream sector, Dr Kwabena Donkor, Chairman of the Parliamentary Select Committee on Mines and Energy, insisted that upstream petroleum activities are very capital intensive and therefore companies that are allowed to participate in the sector should be able to fund their activities. Currently, a Ghanaian company wishing to participate in the upstream petroleum sector has to pay a registration fee of Gh3700.00 equivalent of $2000.00. He disclosed that before the introduction of this new monetary regime, there were over 700 local companies, including hairdressers, registered with the GNPC all wanting a part of the upstream pie. He was of the view that if the monetary bar is set too low the system gets choked and it becomes difficult to pick and choose winners. “Any company that cannot pay $2000.00 registration fee in my opinion has no business being in upstream operations. You can join the other sectors of the petroleum chain and grow your business from there,” he added. Dr Donkor, who is also the Parliamentary Member for the Pru East Constituency, admitted that “whether we like it or not, at this stage of our national development we will have to nurture a number of Ghanaian companies to grow and play the role that the Amaja’s, which are indigenous in any case, are playing currently. The African work force challenge The shape of the African workforce will change dramatically. Currently 60% of Africa’s population is below 25 years. Some 60% of the total labor force engages in some form of self-employment such as subsidence farming and urban street hawking. 120 million people will enter into the labor force over the next ten years. if current trend continues, some 54 million new wage-paying jobs will be created which will new millions without a permanent job. The oil industry needs to invest in the young generation and do all it can to transfer knowledge from the experienced to the younger professionals. SME’s critical for Ghana’s success SMEs create jobs and generate income in low-income countries; often accounting for more than 60% of GDP and 70% of employment. They play a major role in the economy in Ghana. They can influence stability through employment and attraction of foreign direct investments. Small and medium sized enterprises provide opportunities to build stability by connecting different ethnic, social and religious groups through work. Micro and small enterprises have the closest links to local communities providing subsistence and a specialized understanding of local context.