Ascertain capacity of local providers in extractives to determine realistic local content targets

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Musambya Mutambala from STIPRO responding to the questions during the Breakfast Debate

The government should conduct a baseline assessment to determine the targets that the country plans to achieve from the oil and gas sector and set expectations around realistic local content levels.  The argument stemmed from the Policy Forum’s breakfast Debate entitled: “Thinking local: What are the Lessons & Challenges of enhancing Local Content in Tanzania?” that took place on April 28, 2017 in Dar es Salaam.

Presenting on the challenges facing Tanzania’s oil and gas local content, Thomas Scurfield from Natural Resource Governance Institute (NRGI) said the baseline will help to determine the current local capacity and capabilities in the sector and provide what is possible, feasible and detect the beneficiaries (the local communities).

Scurfield recommended for the policies that will contain legally binding requirements for domestic employment, local ownership, in-country goods and services provision and capacity development. Experience shows that without binding requirements, extractive companies often have little interest in enhancing local content. Given established international supply networks, companies may fail to be proactive in sourcing local labour or suppliers even if the necessary capacity exists in the country.

He insisted, “we can draw lessons from Nigeria and Ghana where 280 categories of goods and services were emanating from the realistic policy targets’’.

With regards to the local content and improving technological capabilities in the oil and gas sector, Musambya Mutambala from Science, Technology and Innovation Policy Research Organization (STIPRO) urged the government to commit itself to designing policies that will push for the adoption of more efficient technologies.

Musambya explained that the government should establish an institution to manage knowledge production and use for the development of the oil and gas sector. Its main objective should be to forge collaboration among stakeholders involved in the oil and gas sector and create a synergy that will fuel resources needed for technological capabilities.

Moreover, there is a need of reviewing the national budget allocated for Science, Technology and Innovation (ST&I) activities and consider achieving the promise of allocating 1% of GDP for ST&I issues. The private sector is advised to initiate internal resource mobilization strategies that particularly target financing local enterprises for the technological capacity building.

Dr. Lucas Katera from REPOA underlined on the significance of strengthening middle-level institutions, vocational training schools and technical schools to uncover essential knowledge on local content to the future generation.

The discussion also centered on the view that the government needs to communicate with its citizens and manage their expectations to avoid unnecessary confrontations like the skirmishes that took place in in Mtwara in 2013.

Participants recommended future policy discussion to focus on how local content could benefit marginalized groups especially on issues related to gender and social diversity.

The Local Content Policy of Tanzania for the oil and gas industry also directs that a baseline needs to be carried out to identify the current capacity and capabilities for Tanzanian-owned companies to become suppliers and to develop a needs assessment to identify the capacity enhancement needed for Tanzanian experts in the oil and gas industry.