Africa Surveyors November-December issue 2023

OPINION
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Ensuring Strong Local Content
Policies
Just as local content rules continue to
function as vital safeguards in African oil and
gas operations, they will be tremendously
important in the renewables sector, both for
individuals and for businesses. As I’ve stated
in the past, every nation needs to create
a framework that empowers indigenous
companies to fully capitalize on renewable
energy opportunities.
There are times when power needs may
justify temporary modifications to these
policies. As an example, South Africa’s
National Energy Crisis Committee (NECOM),
early this year, relaxed its local content rules
for the construction of solar modules. Easing
local employment requirements from 100%
to 30% for local component production is
meant to facilitate quicker deployment of
solar projects, and hopefully, help alleviate
the country’s crippling power outages.
Power supply levels and other factors show
the need to perform a balancing act when
writing local content rules. Those other
factors include the supply of current local
skilled workers and infrastructure. We don’t
want to discourage developers, so we need
appropriate, tailored local content regulations.
One reasonable approach is the one taken by
Kenya, where guidelines requiring contractors
to formulate a local content plan have been
drafted. These plans must include training,
succession, jobs, technology transfer, R&D,
legal, financial, and insurance issues. This
approach places the “ball” in the “court” of
each project’s contractor, allowing for their
input in local content formulation.
A similar policy has been enacted in
Nigeria. The local content policy is part of
the government’s Electricity Act 2023. It
requires the Nigerian Electricity Regulatory
Commission (NERC) to provide for local
content participation involving employment,
production, and assembly of components for
solar PV, deep cycle batteries, and the electromechanical
parts of SHP technology, wind
boilers, and some turbines.
The act goes further, requiring contractors,
sub-contractors, and licensees involved in
renewable energy to include local content in
all their related activities.
If widely enacted across the continent, similar
local content rules can work hand-in-hand
with training efforts to ensure Africans
benefit from renewable energy development
— through employment and the growth of
their economies.
We are seeing promising movement in the
effort to address Africa’s skills gap, but we
need many more programs, and we need them
now. African countries and energy industry
stakeholders should be doing everything
possible to support these efforts, so Africans
don’t miss out on renewable energy industry
opportunities.
16 November-December issue l 2023 www.africasurveyorsonline.com