Examine The Efficacy of Local Content Regulatory Regime in Enhancing Social Welfare of People In The Oil And Gas Sector

Abstract

Local content and welfare of people in the oil and gas sector has always been a long-term objective for most resource endowed nation as a strategy of optimizing on their economic benefit from the resources trickle down to the people of that particular country where the resource has been discovered. This is aimed at ensuring social and economic transformation of the people in the oil and gas sector. In recent years, many countries entering into oil and gas production agreements have incorporated local content provisions in their laws and regulations aimed at ensuring the welfare of people within the oil and gas sector that the state and countries reap more from the resource as a way of enhancing social welfare of Ugandans in the oil and gas industry. This has been a response to the historical paradox of plenty which is always associated with a resource curse that has been evident in most resource rich countries in Africa, Asia and in the Latin America where countries have faced both economic and political instabilities due to mismanagement of the countries resources through massive corruption from the top to the bottom where it has only been those that wheel the powers who have been able to benefit from the minerals leaving the rest of the people in absolute poverty. This explains political instabilities in this resource prone countries since the industry in most countries failed to carter for the welfare of the Ugandans inform of employment and skills by the international oil companies. This thesis stipulates that Uganda like the rest of other nations can become prone to the paradox of plenty if the issues to do with the welfare of people is not adequately dealt with since its rich extractive industries couples with huge quantities of minerals oil and gas inclusive. It needed to come up with an effective local content policies, regulations and laws that must ensure that the rest of the economy receives trickle-down effect of the oil and gas benefit effectively so that scores and seeds of discontent among Ugandans can be minimized through enhancing the welfare of Ugandans in the oil and gas industry. This paper concludes that the local content regulatory regime is effective in enhancing social welfare of Ugandans in the oil and gas sector. However, the implementation strategies and balancing the local content policies and investments to avoid those policies that may hinder the growth of the oil sector, For example the absence of skilled manpower, technologies and inadequate locally quality goods which is a legal requirement and this will effectively have an advance impact on the social welfare of people in the oil and gas sector.