MRACH 29, 2018. The American Chamber of Commerce in Ghana (AMCHAM) and the European Business Organization (EBO) have reiterated their commitment to seeing the successful implementation of Ghana’s local content policies and regulations, stating that such policies and regulations must ensure win-win situation for investors and Ghanaians.
“AMCHAM and EBO members are interested in finding the right and capable local partners to work with” comments echoed by AMCHAM’s Executive Secretary, Simon Madjie, and EBO’s ExecutiveDirector, Nico Van Dar Staaldein at a joint event to deliberate on “Creating an Impactful Local Content Regulations for Ghana” held in Accra. Local content regulations have become topical in the oil and gas sector in Ghana, where operators see an emergence of multiple local content laws and regulations which they believe have the potential to affect their investments.
The event had a panel comprising Kwasi Abeasi, Chairman, Board of Directors of the Ghana Investment Promotion Centre (GIPC); Nana Osei Bonsu, CEO of Private Enterprise Federation; George Brakoh, Regional Manager, Local Supplier and Contractor Develpment, Newmont Ghana; David Addo Ashong, Founding Partner, Ashong Benjamin and Associates and Senyo Hosi, CEO of Chamber of Bulk Oil Distributors.
The panelists agreed that local content policies and regulations are important in bringing value and benefits to all stakeholders of the business-including shareholders, employees, suppliers and locals. The discussions bordered on policy coherence and predictability of fundamental condition required by investors.
Kwasi Abeasi was of the view that local content policies and regulations were important for certain industries, indicating that “local content regulations are genuine requests to share the benefits of businesses with the local population.”
Nana Osei Bonsu of PEF highlighted that local content policies usually cover four key elements: local contracts to provide local services and goods; providing local employment opportunities; local equity participation; and technology transfer. He stated that in the mining sector where Ghana has zero equity in companies operating in the sector, local content regulations were intended to share the value generated in the mining sector with Ghanaians. Nana Osei Bonsu cited the good example of Technip FMC, an upstream oil and gas service provider,that had invested in training local engineers, instead of using mostly foreign engineers.
Senyo Hosi of the Bulk Oil Distribution Chamber indicated that given Ghana’s infrastructure shortfall, huge investments is required from the private sector to fill the gap. He indicated that while the country increased its investment attraction activities, some of the local content policies had the potential to turn investors away. He cited policy incoherence regarding local content policy that had given investors wrong signals. He stated that local content policies had been helpful in promoting Ghanaian participation in the downstream oil and gas sector, however, he also noted that those foreign investors who had trail-blazed those sectors like Shell and Total, must be protected from inimical local content policies as they had over the years built local capacity.
George Brakoh of Newmont Ghana stated that local content policies must have a fine balance between meeting the supply needs of investors and the competence of local suppliers. In his view, companies like Newmont tend to benefit when they are able to obtain their required supplies locally. However, he stated that having supplies of poor quality have ripple implications in their supply chain. George recounted that Newmont had invested over the past 11 years in local content policies and have started reaping the benefits.
David Addo Ashong; a legal practitioner, indicated that most of his clients who are investors have raised concerns about an emergence of multiple local content regulations which he said is quite confusing. Also, according to him, there is a worrying situation where some of the local content policies are targeting ownership and equity participation which could turn investors away. He suggested that Ghana should consider a comprehensive local content policies.
Nana Osei Bonsu encouraged businesses to engage policy makers through their business chambers and raise red flags on implementation challenges with policies and regulations such as the local content laws.
Participants at the event also raised concerns about the cost of complying with the increasing number of local content regulations especially in the oil and gas sector. They also raised concerns about some new local content regulations that seemed to have retrospective effect especially on companies that had already made investment. They argued that existing contracts must protected to ensure continuity and investor confidence.
This AMCHAM-EBO joint event is to create a platform for dialogue among investors on issues that affect their business with the appropriate authorities capable of delivering solutions.
Signed:
Simon Madjie Nico C.M van Staalduinen
Executive Secretary Executive Director
AMCHAM GHANA EBO GHANA
