Local Content Policies and Resource Benefits in Emerging Oil Economies of The Developing World: A Case of The Budding Oil and Gas Industry in Uganda

Abstract

The application of Local Content Policies in extractive industries has been positively linked to the realization of resource benefits in the extractive sector such as employment of nationals, participation of local SMEs, enhancement of local technology and the emergence of a strong national oil company. This study purposed to examine the local content policies specific to the oil and gas industry in Uganda and to explore if indeed the application of these policies in the sector can lead to the realization of resource benefits. The methodology adopted was a mix of Doctrinal legal research and qualitative research. The doctrinal research focused on the interpretation of LC policies laws and regulations of the oil and gas industry in Uganda, it also focused on a review of published journal articles, research papers, published texts, institutional reports specific to the research topic with the intent of providing a comparative analysis as well as an in-depth interpretation of the policies. The qualitative research was essential to study the LCPs in practice and assess their impact on the local industry and data was analyzed to inform the findings. It is the conclusion of this paper that the Local Content Policies of Uganda although sound on paper may not be applicable in the social economic situation of Uganda because of challenges in skills gap, lack of job experience required in most job applications, lack of access to affordable finance, difficulty in acquiring internationally accepted QSHE certification, a lack of knowledge of the operations of the Oil &Gas industry, unfavorable tax policies, unfavorable procurement laws, lack of a clear policy on technology transfer. The findings suggest a need for policy review in areas training of locals, governance and monitoring, access international certification in QSHE, affordable financing and incentives specifically for the sector.