African Arguments: Converting resource wealth to economic development: what role for ‘local content’?

This article is based on research and interviews conducted at the International Economic Forum on Africa in Paris on 7th October and was published in full on the blog "African Arguments" of the Royal African Society.

Few topics were debated as intensively at the recent International Economic Forum on Africa in Paris as the question of local content in the oil and mining industry. Local content is commonly understood as the share of materials, parts, etc. for the production of a given product that has been produced locally (instead of imported.)

For many African governments, it is the holy grail of economic policy: by finding ways to make investors procure more services, labour and materials from local businesses, the reasoning goes, their countries will benefit from resource endowments multiple times. The investors in turn seem to have accepted the concept of local content as important, but are mainly interested in limiting its potentially negative effects on their line of business.

Mozambican vice-minister of mineral resources Abdul Razak Noormahomed set the tone for the debate when he declared: “We want to increase the local content, because we want as much as possible small and medium level companies to be part of the business, providing goods and services to the big companies. And we are asking the support not only of the international organisations, but also from the companies in order to support our small and medium level enterprises.” Noormahomed went on to underline the need for technical and financial capacity building as areas where international investors are expected to support Mozambican businesses.

Read the rest on African Arguments!

Rich Links: Natural Gas in Tanzania, Nuclear Power in South Africa and More

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New policy on natural gas coming soon in Tanzania

The government of Tanzania is on the verge of passing a new national policy on natural gas exploitation. So far the country has no specific official policy in that sector and the new legislation wants to address specifically the issue of local content. AllAfrica/Tanzania Daily News (2)

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A sonar system, operated by Exxon Mobile to explore oil fields off the Madagascan coast, is the reason for the death of dozens of melon-headed whales. This is the finding of an independent scientific commission. Global Post

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High hopes for Rwandan mining sector

The Rwandan government wants the country's mining exports to triple by 2017. AllAfrica/Rwanda Focus