Reflections on the Indigenization of Ghana’s Petroleum Downstream Industry (OMC AND BDC activities) and the Possible Upshot on the Country

Abstract

In developing countries, indigenization is a common policy and legislation tool implemented to increase and promote local content and local participation in the various sectors especially the natural sector. However, these policies and legislation produce mixed results as reported by industry players and researchers. In 2005, the act setting up the National Petroleum Authority (NPA), the regulator of Ghana’s petroleum downstream, placed enormous responsibility on the authority to enhance the indigenization of the oil and gas industry in the downstream sector. In relation to this key mandate, the National Petroleum Authority, led by its new chief executive, Dr. Mustapha Al-Hamid, unveiled a major change in state policy with regards to the indigenization of the structure of the sector. This paper seeks to identify and thoroughly examine the possible impact of this impending indigenization of Ghana’s downstream oil and gas industry. Positive impacts such as the infrastructural development in the country, the reduction on foreign control of the economy, the increment in revenue, the indigenous participation and self-reliance it brings to the country are the essential benefits. However, the discouragement of foreign investment as well as the wealthy hijacking the economy will have an adverse effect on the positive impact.