The micromechanisms of power in local content requirements and their constraints on Ghanaian SMEs in the oil and gas sector

Abstract

ABSTRACTLocal content laws have the potential to promote positive synergies between the extractive sectors and African economies. However, their success is a negotiated outcome of interaction between actors. The objective of the article is to emphasize the mechanisms by which local content requirements are negotiated between actors in Ghana’s oil and gas industry, by drawing on Foucault’s concept of power. Data for the study were obtained through interviews, observations and secondary sources. The author found that complex registration systems, administrative details, and financial and technological requirements constituted the micromechanisms of power at play in determining how the local content law was applied in practice. The article demonstrates how these factors limit the activities of small and medium-scale enterprises (SMEs) in the oil and gas sector. The author concludes that the institutional context, the capacity of local SMEs, and the techniques and practices of multinational corporations (MNCs) shape the extent of local participation in Ghana’s oil and gas industry.