An Assessment of Local Content Policy and its Significance for Foreign Direct Investment (FDI) in the Oil and Gas Industry in Ghana.
The concept of local content has gain a worldwide acknowledgement as the debate as to whether indigenes and indigenous business is worthwhile protecting. Local content provides a significant framework in driving the development of Ghana and increase the influx of foreign investment. Therefore, this study sought to provide a comprehensive assessment of local content policy and its significance for FDI in the oil and gas industry in Ghana. It employed a random sampling qualitative methodology through the aid of a well-structured open ended and closed ended questions and found that the introduction of the local content policy increased the level of foreign investment in Ghana through structures laid down in implementing the local content legislation in the oil and gas sector in Ghana. This has also increased locals participating in the upstream oil and gas industry has improved through various mechanisms such as employment, joint venture partnership, supply of goods and services and through sub-contracting. On the whole, the study identified that the local content policy has not been able to significantly achieve its intended purpose since its inception hence, strict implementation and adherence is on the low key. Thus, it is recommended that there should be an establishment of local content funds to support indigenous SMEs to enhance their competitiveness vigorously in the industry with their foreign counterpart thus increasing the participation of Ghanaians in the oil and gas industry and eliminating fronting of foreign companies. Additionally, the local content policy should be strengthened such that foreign investors and local industry players are clear on their overall scope of work so that unnecessary expectation would be reduced to avoid any conflict between industry participants.