ACET calls for local content and value addition compliance in Ghana’s minerals sector

Ghana stands to benefit from local procurement and value addition in the minerals sector if mining companies procure more mining materials and services locally and add value to minerals for local and international consumption.

To drive home this message, the African Center for Economic Transformation (ACET) last week brought together experts in a focus group discussion to validate key findings of a study on the challenges and opportunities for local employment, local businesses in goods and services, ownership and management by local people and participation of local financial institutions in Ghana’s mineral, oil and gas sectors.

The study on ‘Local Content and Value Addition in the Mineral, Oil and Gas sectors’ is a multi-country research undertaking in Burkina Faso, Ethiopia, Ghana, Mozambique, Namibia, Nigeria, South Africa and Zambia. The aim is to provide cross-country lessons on how natural resources can better benefit African peoples and economies.

The 25th August meeting provided insights and knowledge for recommendations to address challenges and maximize opportunities in the mineral, oil and gas sectors.

In his opening remarks, ACET’s Director of Policy Advisory Services, Dr. Ed Brown, said that the study would assess the nature, content and scope of policies, laws and institutions in the public and private sectors governing the natural resources industry. The study would draw on country experiences within and outside Africa, most especially Trinidad and Tobago and Ontario, Canada.

Dr Brown gave a brief introduction of ACET as a ‘think-and-do’ economic policy institute, supporting Africa’s long-term growth through transformation. He said the study had adopted the ACET Policy Engagement Model (APEM) in the execution of the study. APEM is a unique model of multi-layered, multi-stakeholder policy engagement that uses an integrated approach in which analysis, advice and advocacy go hand in hand. APEM draws on experience and best practice from within and outside Africa.

ACET’s President, Dr. K.Y. Amoako, highlighted the importance of sharing country experience to improve local content in the mineral, oil and gas sectors. He said ACET would bring all eight countries together to share country experiences after the completion of studies in each country.

Dr Amoako asked participants to state what country experiences Ghana could learn from the other seven countries in driving the African transformation agenda. In their responses, participants highlighted skills development and the need to draw linkages between the mining industry and academia.

Participants also saw intra-government agency collaboration in the sector as key to improving the industry.  Coupled with this was the need for strong political will to compel mining industries to adopt local content in the procurement of mining materials. Government should provide the necessary infrastructure to improve access to mines, participants said. There were calls for small-scale mining to add value to minerals for both local and international consumption.

Natural resources expert Mr. Alhassan Atta-Quayson gave a draft presentation on the interim findings of the Ghana study. His presentation touched on four main themes, human capital development and employment, local procurement of goods and services, equity participation and local financing.

Mr. Atta-Quayson said mining companies were supportive of local content and value addition but there were concerns about the political will to drive these companies to implement the local content policy in their activities. He said the country has good educational infrastructure, yet companies complained of poor human resources.

Ghana’s mining policy encourages both local and foreign participation in the mining industry, but the policy makes no provision for local private equity participation. Firms with mining leases are dominated by foreigners.

The research also highlighted opportunities for value addition in four main resources, gold, manganese, bauxite and diamond.

The interim study recommends revisiting and implementing the National Supply Development Programme. There is need to revisit local equity participation and project financing and devise relevant mechanisms to improve the current situation. Government must also address infrastructure challenges in the mining industry, the study recommends.

In a discussion session led by ACET’s Research Director, Prof. Joe Amoako Tuffuor, participants highlighted the need to examine weak linkages between industry and academia and to anchor industrial policies in sustainability and competiveness.

Participants called for the accessibility of mining data to the public and the need for a legislative instrument to support value addition in the country.  A follow-up peer-learning event among country researchers is scheduled to take place soon.

 

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