As part of efforts to build the capacity of indigenous businesses in Ghana’s oil and gas sector, industry players are renewing calls for the immediate utilization of the Local Content Fund.
They argue that leveraging this fund is essential to strengthening the capacity of local companies to survive and thrive, especially amidst the current economic challenges.
The Local Content Fund, established under the Petroleum (Exploration and Production) Act, 2016 (Act 919), is designed to provide concessionary loans to Ghanaian companies operating in the oil and gas sector.
Its primary goal is to build capacity of Ghanaian companies in the oil and gas industry and promote economic empowerment among locals.
However, despite its establishment, proceeds from the fund have largely remained untapped, prompting calls for its activation.
Speaking on the matter, Kweku Boateng, Director of Economic and Local Content at the Petroleum Commission, emphasized the urgent need for action, citing the recent economic hardships make it difficult for Ghanaian companies to securing capital from banks.
“The oil and gas business is inherently risky, and that makes it difficult for banks to provide capital to companies in the sector. In these tough economic times, banks are even more reluctant to extend credit facilities. It is imperative that we begin drawing on the Local Content Fund to provide relief to Ghanaian businesses and prevent them from collapsing.”
Despite generating $3.6 billion in contracts awarded exclusively to Ghanaian companies, experts are urging a review of the Petroleum Exploration and Production Act, 2016 (Act 919).
They argue that the Act sets overly ambitious targets, inadvertently placing local oil companies at a disadvantage while favoring foreign entities.
They caution that without adjustments, the Act’s current framework may undermine the growth and competitiveness of Ghana’s indigenous oil industry.
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Source:
3news.com
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