Local Content – solutions from a government perspective

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We have looked at Local Content issues from the perspective of the Government, of skills and local businesses and from that of international companies (ICs).

Let us look at Namibia as a case study in how to build a thriving and sustainable Local Content policy.

This diagram comes from the 2024 BTI Transformation Index report for Namibia and shows both threats and opportunities to the development of an effective Local Content policy.

The barriers described in Government – conflicting regulations, unrealistic targets, lack of institutional capacity, corruption – are also identified in the 2024 BTI Transformation Index report for Namibia. The new administration coming into government have been given notice by the electorate that “business as usual” is likely to be punished by future decreases in their share of the vote and that a change of thinking and attitude amongst decision makers is overdue:

Status Index Namibia
  • in Namibia conflicting regulations are made worse by differences in priorities between competing Ministers, lack of expertise in drawing up those regulations and the bypassing of regulations for corrupt reasons
  • unrealistic targets – “wishful thinking and a lack of realism” are made worse by “inter- and intra-ministerial competition, disputes over ownership, resource shortages and a lack of expertise” (p29)
  • corruption – over a third of formal employment opportunities is in the public sector and state-owned enterprises with youth unemployment at over 50%. Public perception is that factions within the ruling party benefit from corrupt practices despite anti-corruption policies of the government. Tenders are still awarded based on favouritism and personal enrichment. Party members convicted of fraud often retain their positions or return to them later.

This attitude and culture are possible when the ruling party enjoys a significant parliamentary majority and an unsophisticated and loyal electorate. However, we are now in the age of the internet with the youngest two generations making up over 70% of the population, who are increasingly making their intolerance of the “my time to eat” hegemony felt and heard.

In this environment Local Content that focuses solely on the Oil and Gas sector risks being captured by a single Ministry and missing out on wider opportunities to develop other nationally important sectors. This will result in unbalanced development and exclude most Namibians.

The aims of a Local Content policy
  1.   Economic development – boosting local industries, increasing revenue and opportunities.
  2.   Job creation – hiring local workers, proving them with experience and training,
  3.   Capacity building – knowledge transfer to local supply chain, promoting long term skills development.
  4.   Value addition – ensuring that value generated from natural resource extraction or projects stays within the local economy.
  5.   Economic diversification – encourages the development of local ancillary industries that can support other sectors; spurs innovation.
  6.   Community development – investments in social infrastructure such as schools, hospitals and housing; addresses stakeholders’ concerns by strengthening the social licence to operate.
  7.   Government revenue – tax generated from local businesses and royalty revenues.

To achieve these aims Local Content needs to be a strategy not a policy. This approach requires understanding:

  • that Local Content will be part of a system and will generate change within that system
  • this system contains sub-systems that are a set of parts and connections
  • these need to be mapped out and understood
  • the most effective Local Content will provide parts and connections throughout the entire system.

Let’s apply that to the 7 aims listed above:

  1. Economic development – boosting local industries, increasing revenue and opportunities.

Local industries can be supported to become compliant with international standards with the support of international companies sharing their expertise and realistic access to their supply chain.

  1. Job creation – hiring local workers, proving them with experience and training.

Local industries can provide employment and work experience connecting to vocational training programmes and receive financial incentives to do so.

  1. Capacity building – knowledge transfer to local supply chain, promoting long term skills development.

International companies can support the development of education and training materials and equipment to schools and education institutions; they can offer short term work experience to tutors, teachers and trainers.

  1. Value addition – ensuring that value generated from natural resource extraction or projects stays within the local economy.

Building industrial parks with units that have access to water and energy at affordable rents and allowing more private enterprise into government services (e.g., waste management, energy generation).

  1. Economic diversification – encourages the development of local ancillary industries that can support other sectors; spurs innovation.

Within a generation the qualifications and skills base of Namibia will move away from oil and gas. Emerging sectors can be supported with changes in education curriculum and opening government procurement to new providers.

  1. Community development – investments in social infrastructure such as schools, hospitals and housing; addresses stakeholders’ concerns by strengthening the social licence to operate.

These are all underpinned by construction which is a valuable source of skills and experience that can be accessed by hard to reach communities; graduate unemployment can be seen as an opportunity to create a Youth Pioneering organisation who can offer work experience in remote schools and construction projects.

  1. Government revenue – tax generated from local businesses and royalty revenues.

Digitised and transparent tax collection can be underpinned by rolling out of internet infrastructure.

These are just a few examples of ‘parts’ and connections’ of a Local Content system. It is a strategic approach because it is organic, long term and inclusive of the whole system.

Empowering local talent for sustainable growth

At Future Energy Partners we believe in the importance of developing local skills and capabilities. With decades of industrial experience combined with academic achievement, we assist policymakers in defining Local Content Policies and ensuring their successful implementation.

Our expertise enables us to deliver bespoke training solutions that empower individuals and organisations alike. We recognise the value of not only building technical knowledge but also fostering the softer skills essential for success—teamwork, career growth, performance management, and conflict resolution.

We are dedicated to unlocking local potential. To find out how we can support you, contact us today.