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Localisation in Africa’s oil and gas industry
The concept of localisation has been promoted by governments of resource-rich countries as a means for capacity building, human capital growth, supply chain development and partnership with local organisations.
Local content pertains to compliance – many countries have local content laws that require foreign companies to use a certain amount of local labour, materials and services in their processes.
Localisation, on the other hand, focuses more on capacity building – in human capital growth, supply chain development and partnership with local organisations and businesses for talent and infrastructure development. Accordingly, localisation may be seen as a strategy, not just a requirement. In contrast to local content, localisation is powerful in that it enables growth in the communities in which companies operate, while potentially increasing productivity and reducing long-term cost
Given the potential that the African oil and gas industry holds, this report explores the five elements of localisation, changing legislation on the African content and the role of that international oil companies and governments must play in developing sustainable localisation and local content strategies. In addition, the report outlines the challenges and benefits of localisation and what it takes to develop a successful localisation strategy.