Local Content Legislation Must Tackle Challenges Facing Local Players

As the Kenyan government gears on the formulation of a local content legislation that will ensure the participation of indigenous companies in the oil and gas sector experts say for any such law must address various challenges facing local players  for it to be effective.

According to CEO at Oil and Energy services Mwendia Nyaga the obstacles range from lack of financial services, lack of infrastructure, and lack of industry required documents in the sector among others.

Under lack of financial services Mwendia notes that local companies lack access to financial services enjoyed by their international competitors and whereas such services exist the cost is usually higher due to lack of or very few products targeting the sector.

The lack of developed capital markets through which such companies can raise capital is also a contributing factor.

The bill which has an August 27th deadline according to experts must also address the infrastructure gaps that exist including poor telecommunications, transport structures including railways and roads as well as lack of utilities such as electricity and water.

On the taxation front various policies favor international players who mainly import their wares with the zero rating of certain imported products giving imported goods an edge over local products.

Other obstacles include lack of technological capabilities, lack of skills and lack of international certification.

Mwendia recommends that the government and other policy makers should seek to put in place measures that will ensure indigenous players have better capabilities, can team up with international companies with better expertise and can reap the benefits beyond the exploration phase to the long term when a local content presence is a competitive advantage.

He was speaking to delegates at the just concluded 4th International Oil and Gas exhibition and conference.

 

Author: OilNews

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