The 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.
