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Local Content Dream Is A Joke

By Marlvin-James Dadzie || The New Crusading Guide
Opinion Local Content Dream Is A Joke
APR 20, 2015 LISTEN

The call to maximize Ghana's benefits in its recently-found oil and gas resource has been a common crusade trumpeted by every well-meaning Ghanaian. There is a hermetic consensus that Ghana drives this dream to reality by deliberately and strategically increasing Ghanaian participation in the oil and gas industry.

Following the commencement of commercial oil production in 2010, government set a 10-year duration target to achieve 90 per cent Ghanaian participation in the country's oil and gas sector. In essence, the vision is that by 2020 about 90 per cent of the human resource in Ghana's oil and gas front should be Ghanaians. This is undoubtedly a great dream which if achieved, could be a huge impetus to the acceleration of the country's economic development.

However, what has been the engine to drive this goal to fruition? And is there an engine at all in this whole crusade? If there is, who has been oiling this engine? And is the oil enough to keep the engine running?

As I always do in this column, I will mince no words than to state categorically that this loudly-espoused vision is nothing less than a complete joke. Yes, a joke! Government's commitment towards actualizing this dream is deplorable and laughable to say the least.

Now, before I give my reasons let me first throw some light on the structure of the oil industry. The oil and gas industry is divided into three segments usually called streams. These are the Upstream, Midstream and Downstream.

The upstream deals with the exploration and production of the resource. The midstream deals with the transportation and refinery while the downstream concentrates on the supply services.

In the upstream, Ghana is represented by the state-owned oil company, Ghana National Petroleum Corporation (GNPC) with a share of 13.5 per cent at the Jubilee Field. There is virtually zero percent Ghanaian participation in the midstream because Ghana is not taking part in the transport and refinery of the oil. The downstream which is the area with the potential to benefit many Ghanaians is also faring poorly as many Ghanaian businesses are unable to secure contract with oil firms for supply services.

Even those in the hotel industry are not reaping much because oil firms are now renting houses on long term basis for their guests and workers.

For farmers, they are told that their produce do not meet the required standard. The oil companies are importing almost everything. Just name them- vegetables, fruits, salt and even water.

It is therefore obvious that currently, Ghanaian participation in the industry is very low. What is even more worrying is that much is not being done to change this situation. We've spent almost half of the target duration and nothing seems to be happening. The 90 per cent local content and participation target set for 2020 cannot be achieved if government continues to fold its arms and look-on unconcerned.

I know some people may quickly point out that the Local Content and Participation bill has been passed into law. Of course it has been passed but what good is this law if the very people the law seeks to empower are without the requisite skills for the job.

We have been told that the Jubilee Technical Training Center (JTTC) at the Takoradi Polytechnic was going to be the starting point to drive the human resource development for the oil sector. As a result, six-month courses in Instrumentation, Processing, Mechanical and Electricals with British certification specifically for the oil sector were introduced.

However, it would surprise you to know that each of these courses cost a whopping GHC10,000 (one hundred million old cedis). You ask yourself how many locals can afford this fee? I wasn't therefore surprised at all when I found out that almost half of the 33 graduands at the center's last graduation ceremony were non-Ghanaians. The center has been virtually dormant as it struggles to have people patronize it. Is this the kind of human resource development acceleration we are talking about? I don't think so.

Similar to the JTTC is the Enterprise Development Center (EDC) in Takoradi which was also established by government-Jubilee Partners collaboration. The aim is to build the capacity of locally-based Small and Medium Scale Enterprises (SMEs) to enable them take advantage of opportunities in the oil and gas sector. However, there seems to be no link and collaboration between the EDC and the oil industry. The EDC only takes participants through some few months of training and abandon them to their fate after completion of the course.

Indeed, many of the SMEs that undergo training at the EDC are unable to secure contract in the oil industry. Is this the kind of local content dream we are pursuing? It is clear that government commitment is questionable.

And I am also beginning to believe that this whole cacophony from the Jubilee Partners especially Tullow Oil Plc that they are interested in assisting Ghana achieve its local content target is far from the truth.

In Uganda, Tullow in collaboration with the Irish government has been able to establish an institution similar to the EDC called Tradelinks. Unlike the EDC which only trains and abandon the SMEs, Tradelinks trains and organize farmers into cooperative groups and ensure that their produce are supplied to the oil companies. In essence, once a farmer gets enrolled at Tradelinks, he automatically gets his produce supplied to the oil companies. Tradelinks supervise and monitor these cooperative groups and ensure that their produce meets the standards of the oil companies. Many farmers in Uganda are benefiting immensely from this initiative though the country is yet to fully commence its oil production.

So I ask: why is Tullow as the lead operator of the Jubilee Field not replicating this initiative here if it's really interested in assisting Ghana realizes its local content dream? Why is the EDC format different from Tradelinks? The answer as being bubbled in my medulla oblongata is simple- they are just not interested in our cause.

It is therefore the responsibility of government to take an active and lead role in our local content journey. Government must show more commitment to this cause. We can only realize our 90 per cent target with deliberate and committed efforts to accelerate our human resource development.

Ghanaians must take charge of their natural resources without any further delay. Efforts must be increased to reverse the current trend else the local content dream is nothing but a big joke!

I've said it!

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