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Opinions of Saturday, 25 June 2011

Columnist: Agyemang, Frank

Making Local Content Initiative work in the Mining Sector

Just as I thought we as a nation had lose the opportunities associated with Local Content Policy in the Telecommunication and Mining sectors of the economy, Newmont Ghana, one of the global giants operating in the country has initiated activities towards the realisation of the Local Content policy in the mining sector.

Newmont Ghana is working closely with other mining companies in Ghana and the Minerals Commission to develop a realistic and sustainable Local Content policy for the industry. The Company had recently involved the International Finance Corporation (IFC) in detailed discussions and is hoping to endorse a three-way MOU between the Chamber of Mines, IFC and Minerals Commission for the development of a short/medium and long term Local Content program for Ghana.

Whiles Parliament is yet to consider the Local Content policy and give approval for its execution, Newmont Ghana has commenced the execution of its intention to patronize more goods and services from indigenous companies.

The Chief Executive Officer of Ghana Minerals Commission, Mr. Ben Aryee acknowledged the proactive role Newmont Ghana was playing and called on the other mining companies to be part of the course. At a programme organised by the mining company to meet local manufacturers/ potential suppliers, Mr. Aryee was optimistic that the Local Content agenda would become a reality within the mining industry as the other mining companies have expressed interest to see this initiative materialise.

Newmont Ghana’s initial strategy is based on working with existing and potential manufacturers of 27 product groups within Ghana to develop and improve local businesses so they can effectively support the needs of the Ghanaian market place and also be internationally competitive in the longer term.

At the Government level, Cabinet has approved the policy framework for local content and local participation in petroleum activities. The policy is to be developed into legislation to ensure that Ghanaians derive maximum benefits for Ghana’s oil find.

The Local Content initiative became more relevant with the Oil find in Ghana. Local Content is a documented policy indicating desire of a government to actively engage indigenous or local companies in economic activities hitherto reserved for foreign investors, especially the oil and gas industry. Local content means the development of local skills, technology transfer, use of local manpower and local manufacturing.

The Local Content policy provides a huge opportunity for job creation and builds the indigenous capacity or technical expertise of local companies and entrepreneurs. This indirectly becomes a stimulant for growth of other sectors of the economy which eventually contributes to the nation's Gross Domestic Product (GDP) or output. A local content policy in Ghana's sensitive industries would serve as a tool for the advancement of local development not only in the identified industries but in the economy as a whole. Such policies backed by the appropriate legislation and procedures would build human capacity as well as capabilities of local companies which certainly will have a multiplier effect on the economy.

Indigenous companies and entrepreneurs hope to see this Local Content policy materialise as soon as practicable since that will be a major booster for their growth. It now lies with indigenous manufacturers and service providers to adopt international best practices to produce quality standardised products and services because no company would compromise on that.

Frank Agyemang