Government must thread cautiously with local content law in downstream sector – Akwaboah

• Government is seeking to increase local participation in the downstream sector

• The move is said to derail efforts of FDIs into Ghana

• Ghana has an array of Oil Marketing Companies and Bulk Distribution Companies

Government’s decision to steadily pursue a local content law in Ghana’s downstream sector is said to impact investor confidence, former Chairman of the Association of Oil Marketing Companies, Henry Akwaboah has opined.

According to him, government must make a careful consideration of the overall terrain despite making efforts to increase local participation in the downstream sector.

In an interaction with Citi Business News, Akwaboah explained that an aggressive local content regime is likely to have adverse impacts and ultimately derail efforts to attract foreign direct investment into Ghana.

“We have to remember that all these multinational companies came at a time when Ghanaians did not have the financial resources and the capacity to operate the sector and to me, if many years down the line you’re now saying to these multinationals or foreign companies that Ghanaians have come of age, therefore, pack bag and baggage and leave the industry, we are really setting a bad precedence,” he pointed.

“I think the government has to tread cautiously because this can have a serious backlash for all the foreign direct investment that we’ve been going out to campaign for, not just at government level but even at our individual levels as there are discussions about having people invest in the oil sector and other sectors. So, we don’t have to send the wrong signal to the rest of the world that when you come and invest in Ghana, some years down the line you’re going to be asked to leave and give Ghanaians the chance,” Akwaboah added.

The caution however comes after the National Petroleum Authority (NPA) had earlier indicated of plans to roll out a policy that will reserve distribution, importation and sale of refined petroleum products for domestic companies.

The policy by the NPA which is yet to fully effect is hinged on granting foreign-owned Bulk Distribution Companies and Oil Marketing Companies the premise to recover the full value of their assets.