4, May, 2017
BRIEFS

Oil and Gas Local Content Development Strategy: The Keys to Success

This policy brief aims to identify common factors in successful local content strategies by comparing the experiences of countries that have achieved reasonable positive local content outcomes.

Local content is a development strategy aimed at increasing the benefits from the oil and gas sector, and translating these to other sectors of the economy. While this strategy has been widely adopted in Africa and Latin America there is little known beyond specific country cases as to the reasons why local content strategies have or have not been successful. This policy brief presents recommendations that African countries such as Uganda, Kenya, Tanzania and South Sudan that are still developing local content strategies could find important in improving their local content frameworks, strategy and institution building for better local content outcomes. In particular outcomes in terms of skills development, jobs creation and involvement of local companies.

In this policy brief we attempt to identify common factors in successful local Content strategies by comparing the experiences of countries that have achieved reasonable positive local content outcomes. To do so we looked at the experiences of seven Latin American and seven African countries. Using a comparative strategy makes it possible to identify conditions that are present across cases that are very different from one another in many respects, but which have led to success in the implementation of local content frameworks.

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Key Lessons:

  • Local content strategies have the potential to be more successful if they are backed by sector-specific legal frameworks guaranteeing their measurement, implementation and monitoring.
  • National Oil Companies should play a prominent role when defining and implementing local content. Their involvement in this process can lead to positive local content outcomes in spite of other structural challenges such as limited independence from the government.
  • Policy makers should consider short and long-term benefits when designing local content policies.

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