Ghana would make better gains from its oil and gas wealth if
it were to align participation and interest-holding by local businesses to
entities which are competitive and well-capacitated.
According to a Management Consultant, Mr Bennet Kpentey, it
will be perilous and suicidal for the nation to continue to encourage the
packing of the oil and gas sector with mediocre local business firms.
“Don’t saddle the upstream and midstream [sub-sectors of the
industry] with non-performing local companies,” Mr Kpentey cautioned last
Tuesday at a Public Forum on the Oil
& Gas Sector and the National Economy held in Accra by the Integrated Social Development Centre
(ISODEC).
Though the nation’s Local Content and Participation Policy
included mechanisms for up-scaling opportunities for local companies, the onus
lied with firms themselves to first improve their capacities and then position
themselves in the way of the opportunities, Mr Kpentey posited in a paper
titled “Ghanaian Businesses: What
Industrial Capabilities and Opportunities? “ “What is important is that
Ghana’s private sector must rise to the occasion,” he pointed out, stressing
that “mediocrity won’t take us [private sector] far.”
Mr Kpentey, also a Chief Executive of Sync Consult and
lecturer at the Ghana Institute of Management and Public Administration
(GIMPA), identified that Ghana requires that local firms develop deep
understanding of the oil and gas sector, cultivate smart relationships with
other companies, and reorient themselves and transfer capabilities. On the part
of government, there must be an insistence on the enforcement of the local
content policy privileges.
Nonetheless, government and state agencies mandated to
oversee the implementation of the policy on indigenous firms’ involvement in
the sharing of benefits and ownership of oil and gas activities must not shirk
their responsibility in protecting local interests.
The forum, which ISODEC themed: “Enhancing Stakeholders Knowledge on the Economy-wide Linkages of
Ghana’s Oil and Gas Sector for Poverty Reduction,” brought together senior
policy officials, civil society leaders, private sector people, researchers and
experts.
In conceptualising the meeting, ISODEC had said “We have
particularly been mindful of the nation’s inability in the past, to adequately
tap benefits from the extractive sector, especially with lessons from the
mining sector.”
It further
expressed worry that the majority of Ghanaians lacked the right mix of
capabilities and financial leverage to play effectively in the industry.
Nonetheless, it took delight that government had indicated a desire to ensure
that the oil wealth led to an equitable and transformed development of Ghana,
in particular industrialising Ghana on the back of the oil industry; ensuring
the development of oil and gas industry and its effective linkage to the rest
of the economy; converting the opportunities offered by the oil and gas
industry to create decent jobs; diversifying the economy with emphasis on the
processing of raw materials; and strengthening institutional capacity, amongst
others.
The number of local entities presently offering goods and
services to the oil and gas sector is unclear but contributors at Tuesday’s forum
pointed out that whereas having as many local businesses as possible
participating in the oil and gas sector would accrue a lot of benefits through
employment generation, value addition and tax revenue mobilisation, packing the
sector with mediocre businesses can pose great risk in the form of cronyism and
corruption.
The Africa Regional Co-ordinator at Revenue Watch Institute,
Mr Emmanuel Kuyole, was of the view that care must be taken in promoting non-performing
firms because they take advantage of patronage to breed cronyism and
corruption.
He reasons that the solution lies in riding on lessons from
the mining sector of the country to promote contracts for actual, existing
companies and prevent local companies from fronting for foreign establishments
in return for handshakes.
Sharing a view, Nii Adzei-Akpor, Acting Chief Executive
Officer of Petroleum Commission, Ghana, observed that many Ghanaian firms
abhorred collaboration because of selfish tendencies. According to him, this
habit would hamper local firms from maximising benefits from the oil and gas
sector.
Thus, they should begin to collaborate and build business
partnerships and alliances to ensure they develop the requisite capacity and
leverage resources for participating in the sector.
Published in Public Agenda on Friday, April 12 2013.
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