Energy Chamber Tasks African Governments On Local Content Development

Posted by Eric Ojo Latest Headlines, News, News From The State Monday, September 7th, 2020

(AFRICAN EXAMINER) – The African Energy Chamber, an organization working with indigenous companies across Africa to optimize their reach and networks, has urged African governments and companies to develop better implementation of local content policies.

The Chamber which is committed to upholding result-focused environment for companies operating in the industry across Africa, also reiterated the need for governments to come up with new approaches putting entrepreneurship and capacity building as priorities.

The Local Content Committee of the Chamber gave the charge during its first meeting held penultimate Tuesday to chart the way forward for energy sector in the continent.

Issues around the perceptions and understanding of local content dynamics were major topics of discussion at the meeting as the Chamber reaffirms it resolve to consistently place local content development at the core of it activities.

As the COVID-19 pandemic further increases the need for localizing value chains in Africa, according to the Chamber, local content development is set to become even more important for all industry stakeholders.

Its success will ultimately depend on the nurturing of capable and patient African entrepreneurs able to raise capital and engage regionally with the right partners to build successful ventures. In such a journey, cooperation with international companies, but especially amongst African entities, will be crucial.

With several established markets like Nigeria or Angola and frontier energy markets such as Senegal or Uganda, the oil sector supports several of Africa’s economies. As a result, the African local content has become a key priority for government, regulators and industry stakeholders.

From financing African starts ups, SMEs and companies to promoting an enabling business environment, it was agreed at the meeting that African governments and regulators need to rise up to the task and provide for better conditions and environments for African entrepreneurs to thrive.

Meanwhile, established African energy markets such as Congo Brazzaville, Equatorial Guinea or Gabon are still missing a pool of strong local companies across the value-chain, and especially in upstream.

Despite producing oil and gas for decades, their environment has remained until now unfavorable to the nurturing of entrepreneurs in oil and gas, especially because of a lack of domestic financing.

The regionalization of the African content was also identified at the meeting as a key trend for the short and medium-term. From all indications, with the roll out of the African Continental Free Trade Area (AfCTFA) and upcoming first oil and gas in many African markets, the potential to have local content move away from a pure international-local perspective is real.

This is especially an opportunity for local companies within established markets, be it Nigerian companies regionalizing the oil and gas content or South African and Kenyan companies regionalizing content within the renewable energy space.

African companies have the means and opportunities to create regional ventures and partnerships taking the African content development to a new level, and must be seizing them.

Interestingly, inclusion in the workforce is set to become a major focus for the Chamber and its Committee, especially when it comes to promoting youth and women inclusion in the extractive industries.

A sustainable African energy industry will only be as strong as it is inclusive, and better mechanisms and policies need to be put in place to ensure African women and youth can build successful careers in the sector.

In that regard, upcoming producers such as Senegal, Mozambique or Uganda have a unique opportunity to truly innovate as they develop their own approach to capacity building and local content development.

Nj Ayuk, Executive Chairman, African Energy Chamber and Chief Executive Officer (CEO) of the Centurion Law Group, cited Nigeria as a classic example of a country that is getting it right when it comes to the issue of local content development.

“On local content, look to Nigeria. It has used its oil and gas as a jumping off point for overall economic development and building up domestic capacities from the ground up while providing the right opportunities for the establishment and growth of strong local companies across the value chain”, he stressed.