Indigenisation of major projects: everything in moderation?

Author: | Published: 23 Feb 2015

Africa’s governments are pushing the indigenisation of major projects. For international sponsors and lenders, it introduces home and host country compliance concerns

As oil prices have tumbled, the drive towards increasing local content in major projects continues to trend in precisely the opposite direction. There is, across Africa in particular, a strong and sustained push towards encouraging indigenous contractors, up-skilling local workforces and increasing local value retention. The main contributors to these goals are local procurement, local employment, state participation and social funding contributions.

It's a trend that's now spreading through various economic sectors. But energy and natural resource projects kicked off and catalysed this push towards indigenisation, and gave it traction amid increasingly international dominance. Nigeria is a case in point. Its Local Content Act of 2010 seems to have found success, with the addition of local jobs, greater value retention and the creation of a development fund....