Local Content is a strategic tool used by countries rich in natural resources (oil, gold, diamonds, mining, etc.) to make the most of the exploitation of their resources for the benefit of their populations. This article offers some tips for promoting it in oil and gas activities in Africa.
There is no universal definition of the concept of Local Content, but it can be said that it generally encompasses the conservation within the country of the maximum income from the exploitation of natural resources, through the employment of the national workforce. The use of national companies for the supply of goods and services in the oil and gas value chain, the local manufacture of tools, equipment and materials essential to the sector, the development of local skills and technologies, to support the development of the industrial fabric with a view to a structural transformation of the national economy are also measures that are part of the promotion of Local Content. While the development and promotion of Local Content is dynamic and evolves according to the context of each country, several mechanisms can be exploited.
Legal context
One such mechanism is the introduction of incentives into legal and regulatory frameworks (law, petroleum code, etc.) that provide tax benefits or subsidies to companies that use domestic goods and services or that prioritize local human capital building and technology transfer. For example, the Ivorian Law No. 2022-408 of June 2022 promotes the maximum use of the national resource, the transfer of skills and technology. Similarly, Law 2019-04 adopted in 2019 in Senegal encourages, among other things, the development of a qualified and competitive local workforce, technology transfer, etc.
NOCs
Another measure is to set up a National Oil Company (NOC) in charge of the management and supervision of all activities in the oil and gas chain. Most APPO Member Countries have NOCs. These NOCs remain the linchpin of their countries for the effective implementation of the national hydrocarbon policy. NOCs can have stakes in CPPs, with stakes of up to 55%. Still others operate 100% blocks, from exploration to marketing and production, even though all their staff are nationals.
The establishment of a dedicated structure
The aim here is to create an autonomous national structure specifically dedicated to the development, promotion, monitoring and evaluation of Local Content activities. This is the case, for example, of the Nigerian Content Development and Monitoring Board (NCDMB) in Nigeria created in 2010 with the mandate to coordinate, supervise, monitor, and evaluate the effective implementation of Nigerian Content.
Financing mechanisms
In Nigeria, for example, a specific fund called the Nigerian Content Development Fund has been created to support and incubate local SMEs/SMIs. This fund, managed by the NCDMB, is funded by a levy of 1% of each contract awarded to any operator, contractor, subcontractor, alliance partner or any other entity involved in a project, operation, activity or transaction in the upstream sector of the Nigerian oil and gas industry. This amount is deducted at source and paid into the Fund. Facilitating access to finance allows local SMEs to invest in new technologies and infrastructure to strengthen their competitiveness.
The creation of supply agencies
The creation of a national agency/entity for the procurement of goods and services required in the value chain also promotes Local Content. Such an institution monitors, evaluates and informs foreign oil companies of the availability of the national supply of goods and services.
Training
The promotion of Local Content includes the development of quality and diversified human capital necessary to meet the needs of the oil and gas value chain.
Cooperation
To promote Local Content, states can strengthen cooperation in technology transfer between foreign oil companies and national research institutions and universities to ensure national ownership of new technologies.
Sharing lessons learned
The sharing of experience and good practices through the strengthening of bilateral/multilateral cooperation is also a guarantee of the promotion of Local Content. Countries with proven experience in Local Content can share their know-how with their peers. A good example of this practice is the signing, in February 2023, of a MoU between Senegal (Technical Secretariat of the National Committee for Monitoring Local Content-ST-CNSCL) and Nigeria (NCDMB) on the development of Local Content. Nigeria has extended its technical and strategic support to several countries, including the Republic of Congo, Ghana, Gabon, Kenya, Niger, and Uganda.
APPO is committed to the promotion and development of Local Content in the oil and gas activities of its Member Countries. The terms of the Brazzaville Agreement signed on November 4, 2025 by the Members of the Ministerial Council fall within this framework, with the stated objective of “working together in a spirit of cooperation and mutual respect to achieve the shared vision of a thriving African oil and gas industry that benefits the African peoples.”
