Nathan Tete Tei: Oil-Producing Ghana Requires Local Content to Promote its Industry
Ghana is committed to building the capacity and capability of local people and businesses to support the long-term development of Ghana especially through the emerging sector of petroleum activities.
Ghana, as an oil and gas producing nation, has introduced requirements for local content into its regulatory framework. These requirements aim to create jobs, promote enterprise development and accelerate the transfer of skills and technologies. Local content has therefore become a strategic issue for the oil and gas industry—presenting opportunities and challenges.
Generally, as part of the labour test will be an aspect which significantly impacts local content and the employment of expatriates across all sectors of the economy. In its simplistic form, an employer who seeks to employ a foreigner must first demonstrate that employing the foreigner has become necessary because there is no indigenous Ghanaian who possesses the required skills, competence and expertise to occupy the position being sought to be filled. In practice, this is a key consideration of the Ghana Immigration Service in issuing work authorisations.
That aside, as already indicated, much of local content is rigidly enforced in the petroleum industry from the beginning to the end of the industry’s value chain – from exploration to marketing to disposal of petroleum.
Tei Legal Consult is developing a guidance document which is based on efforts to develop good practice in managing local content as provided in Ghana’s regulatory framework (the local content regulations – LI 2204). It summarily explains;
a. Local content requirement in general pertaining to the petroleum industry;
b. The local content requirements in terms of equity participation of indigenous Ghanaian companies in foreign corporations engaged in petroleum activities; and
c. Other compliance requirements in areas such as recruitment, training and knowledge transfer, legal services, financial services.
The guidance document which will be made available soon is aimed at companies and other company representatives with responsibility for this objective.
Nathan Tete Tei is an expert legal consultant at Tei Legal Consult
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