10 Local Content Policies in the Energy Transition Era …
315
Lastly, the chapter introduces the creation of a regional content policy
as a novel means of adopting local content policies for developing local
content policies for emerging economies such as Kenya, Tanzania and
Uganda.
10.2 Breaking the Enclave in the East African
Oil and Gas Industry
Small resource-rich economies such as Tanzania, Kenya and Uganda
are largely dependent on the lucrative extractive industry. The foreign
direct investment flowing into these small economies dominates these
economies with their substantial proportion of goods, services, tools,
R&D facilities, personnel and technology as well as service suppliers into
the extractive industry.
16 The nature of a multinational investor coming
into East Africa with intact linkages does not serve the potential growth
and development in other key areas of the economy such as the agricultural, manufacturing and services sector. The nature of the extractive
industry inadvertently creates an enclave industry that domestic suppliers
cannot integrate to develop their domestic capabilities and compete
against the international market participants.
17
It should be noted that countries such as Norway and Brazil have
adopted and implemented local content policies to break the enclave
nature of the oil and gas industry. Developing countries such as Kenya,
Tanzania and Uganda have followed suit. The main aim of implementing these policies is to create downstream value-added products
in the domestic industry, to strengthen backward and forward linkages, to drive innovation and develop technological capability in the
domestic workforce, to diversify the economy and to secure growth and
development of the oil and gas resources.
16 Ibid.
17 Ackah-Baidoo, Abigail. “Enclave development and ‘offshore corporate social responsibility’:
Implications for oil-rich sub-Saharan Africa.” Resources Policy 37.2 (2012): 152–159.
315
Lastly, the chapter introduces the creation of a regional content policy
as a novel means of adopting local content policies for developing local
content policies for emerging economies such as Kenya, Tanzania and
Uganda.
10.2 Breaking the Enclave in the East African
Oil and Gas Industry
Small resource-rich economies such as Tanzania, Kenya and Uganda
are largely dependent on the lucrative extractive industry. The foreign
direct investment flowing into these small economies dominates these
economies with their substantial proportion of goods, services, tools,
R&D facilities, personnel and technology as well as service suppliers into
the extractive industry.
16 The nature of a multinational investor coming
into East Africa with intact linkages does not serve the potential growth
and development in other key areas of the economy such as the agricultural, manufacturing and services sector. The nature of the extractive
industry inadvertently creates an enclave industry that domestic suppliers
cannot integrate to develop their domestic capabilities and compete
against the international market participants.
17
It should be noted that countries such as Norway and Brazil have
adopted and implemented local content policies to break the enclave
nature of the oil and gas industry. Developing countries such as Kenya,
Tanzania and Uganda have followed suit. The main aim of implementing these policies is to create downstream value-added products
in the domestic industry, to strengthen backward and forward linkages, to drive innovation and develop technological capability in the
domestic workforce, to diversify the economy and to secure growth and
development of the oil and gas resources.
16 Ibid.
17 Ackah-Baidoo, Abigail. “Enclave development and ‘offshore corporate social responsibility’:
Implications for oil-rich sub-Saharan Africa.” Resources Policy 37.2 (2012): 152–159.