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R. S. Muhongo
the countries do not have the domestic demand to contain the gas
supply for their domestic consumption. But the following are the lessons
that Kenya, Uganda and Tanzania can take into consideration from the
Norwegian and Brazilian experience.
a. The nascent oil and gas economies must have clear guidelines to
the roles and responsibilities of different stakeholders. The economies
must have a favourable business climate to bolster further investment
that is backed by good transparent political decisions.
b. The nascent oil and gas economies must not only place emphasis on
the rents that are accrued from the multinational oil companies but
also the development of competent domestic-based firms that leverage
on the domestic capabilities to integrate the oil and gas value chain.
c. The nascent oil and gas economies must also create a synergy between
the domestic and international supply firms so as to develop competence in terms of price, quality and delivery within the domestic
industry.
d. The nascent oil and gas economies must understand that the oil
and gas industry is characterized by highly sophisticated technology.
Hence, they must invest in technology development and capabilities,
through educational programmes in tertiary institutions. Furthermore, through shadowing schemes between foreign and local experts.
e. The fact that Kenya, Uganda and Tanzania are nascent oil and gas
economies, the local content policy is ‘protective’ in nature. The
policy creates a deliberate preference for domestic firms in terms of
goods and services. These economies must take note that the oil
and gas industry is an industry intertwined with global value chains.
The industry’s main customers and investors are not found in the
domestic market. Having strong protective measures, through local
content policies, will inadvertently delay further investment in the
sector. Secondly, multinational oil companies are not found in transferring technology to domestic firms the governments must devise
means that develop these capabilities faster and not being dependent
on the foreign investors.
f. The nascent oil and gas economies must take note that the discovery
of their resources is during the wake of the clean energy wave. With
R. S. Muhongo
the countries do not have the domestic demand to contain the gas
supply for their domestic consumption. But the following are the lessons
that Kenya, Uganda and Tanzania can take into consideration from the
Norwegian and Brazilian experience.
a. The nascent oil and gas economies must have clear guidelines to
the roles and responsibilities of different stakeholders. The economies
must have a favourable business climate to bolster further investment
that is backed by good transparent political decisions.
b. The nascent oil and gas economies must not only place emphasis on
the rents that are accrued from the multinational oil companies but
also the development of competent domestic-based firms that leverage
on the domestic capabilities to integrate the oil and gas value chain.
c. The nascent oil and gas economies must also create a synergy between
the domestic and international supply firms so as to develop competence in terms of price, quality and delivery within the domestic
industry.
d. The nascent oil and gas economies must understand that the oil
and gas industry is characterized by highly sophisticated technology.
Hence, they must invest in technology development and capabilities,
through educational programmes in tertiary institutions. Furthermore, through shadowing schemes between foreign and local experts.
e. The fact that Kenya, Uganda and Tanzania are nascent oil and gas
economies, the local content policy is ‘protective’ in nature. The
policy creates a deliberate preference for domestic firms in terms of
goods and services. These economies must take note that the oil
and gas industry is an industry intertwined with global value chains.
The industry’s main customers and investors are not found in the
domestic market. Having strong protective measures, through local
content policies, will inadvertently delay further investment in the
sector. Secondly, multinational oil companies are not found in transferring technology to domestic firms the governments must devise
means that develop these capabilities faster and not being dependent
on the foreign investors.
f. The nascent oil and gas economies must take note that the discovery
of their resources is during the wake of the clean energy wave. With