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United States not happy with local content bill

usThe United States government is not enthused about portions of Ghana’s local content and local participation in the petroleum activities policy now before Parliament.

The US has particular issues with the restrictive clauses prescribing timelines for achieving certain levels of local content and equity participation, an approach Ghana’s long standing economic and political partner believes could be counter-productive for the country.

The US Ambassador to Ghana, Mr Gene Cretz, told a section of the press that the policy’s current provisions  could  make  it difficult to attract foreign capital, technology and expertise.

Local content and participation refers to the level of use of Ghanaian local expertise, goods and services, people, businesses and financing in oil and gas activities.

The government is seeking to rely on the policy to achieve at least 90 per cent of full local participation in all aspects  of  the petroleum value chain by 2020.

“We are not opposed to local content. Every government across the world has the right to establish its own approach in how foreign investment should be done. But there are a few specific things that — not only the US but other foreign investors — we are talking to the government about because it is important to get things right,” Ambassador Cretz and the Economic Counselor of the US Mission in Ghana, Mr Joel Wiegert, explained.
This was during an interaction with a section of the media in Accra.

Ghana put together a Local Content and Local Participation in Petroleum Activities policy between late 2008 and middle of 2009 to ensure the participation of indigenous companies and individuals in the country’s upstream petroleum sector.

They added that local content was very important for the United States as one of Ghana’s primary development partners and “we recognise the need to get it right and avoid creating uncertainties in a market place that is so capital-intensive.”

Ghana is US’s fourth largest export country in sub-Sahara Africa with the merchandise exports out of the US totalling US$1.3 billion last year, growing by nine per cent.

Ghana also exports cocoa, gold, textiles, crude oil and other products to the United States under a special dispensation, the Africa Growth and Opportunity Act (AGOA), to boost exports from AGOA eligible countries, including Ghana, to the US.

The US said its concerns over the local content also bordered on penalties with respect to default and equity participation in very compressed time schedules.

“We will continue to dialogue with the government on how best to achieve the local content objectives without making it difficult for companies to comply with its provisions,” Mr Cretz said.

Opportunities

The US is happy that their businesses are well received in Ghana as they have become a leading source of quality products for local companies.

“US companies are sources of high quality goods and services for local companies and the American brand is popular in Ghana because it symbolises a commitment to quality, service, corporate responsibility and strong ethics,” Ambassador Cretz stated.

Mr Cretz said the agricultural sector in Ghana was poised to take off but the public and private sectors must work together to renew ongoing initiatives such as feed the future and nutrition with local farmers to resolve problems of uneven quality, to enhance current rudimentary production processes and to increase awareness among international buyers.

Ambassador Cretz expressed support for the country’s fiscal plan, saying although they were difficult decisions, they could yield positive medium to long term gains.

He said the US in collaboration with the government had identified challenges in the power sector, agriculture and access to credit as initiatives it wanted to support the country to overcome, with each designed to improve the economic infrastructure of the country for better export possibilities.

The Agricultural Counsellor from the US Department of Agriculture, Mr Kurt Seifarth, said the US was also working with Ghana to assist with technical support for areas such as standards and quality issues so as to overcome export challenges in its agricultural product exports.

He said the US had started talking to Blue Skies, which exports to Europe, to start exporting fruits to the United States as initial steps to help the country boost its exports under AGOA.

Source: Graphic Business/Ghana

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Reporting Oil and Gas project was launched on 4th June 2009atTakoradi, Western Region, Ghana by Penplusbytes (PPB – www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector
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