Habari za Punde


Hon. Salama Aboud Talib, Minister of Lands, Water, Energy and Environment,
Mr. Ali Khalil Mirza, Principal Secretary, Ministry of Lands, Water, Energy and Environment,
Prof. Joseph Semboja, CEO UONGOZI Institute,
Recognizing also the presence of:
·        Hon. Abdul Ignosi Koroma, Deputy Minister,  Ministry of Mineral Resources republic of Sierra Leone,

·        Hon. Adam  Mutawakilu (MP), Vice Chair of the Parliamentary Committee for Energy and Mines Parliament of the Republic of Ghana,

Distinguished Participants,
Ladies and Gentlemen.

Good morning,
I feel honoured to be invited to officiate this very important regional roundtable on “Extractives for Human Development: Maximizing Domestic Participation along the Value Chain”.

I thank the organizers - UONGOZI Institute, and Ministry of Lands, Water, Energy and Environment for this timely initiative.

I am delighted to welcome all the distinguished participants who have travelled from the region to be present at this important forum. I also thank and welcome the resource persons who have come to share their knowledge and experience with us to ensure an outcome that is grounded in concrete realities. 
I warmly welcome all of you to Zanzibar.  KARIBUNI SANA!

Ladies and Gentlemen,
As you know the extractive sector adds value to human lives but also in many ways it causes problems both politically, economically, socially and enviromentally. Many countries particularly from the developing world the natural resources are more of a curse than blessing.  This has been in many ways due to having policies, laws, regulations, and strategies that do not maximize domestic participation along the value chain. As a result, many people tend to feel left out. 

Tanzania will soon enter the ranks of oil and gas producing countries. The discoveries to date in the mainland are very large, and in Zanzibar there are huge prospects. These discoveries offer significant opportunities to fast track economic development and ensure that public welfare improvements are delivered to citizens. Both Governments are determined that these resources should generate the best possible returns for the country and build the foundation for socio-economic transformation, as well as broad-based growth and development. 

Ladies and Gentlemen,
Using minerals, oil, and gas as a catalyst for broad-based growth and development requires more than attracting investment to extract the resource. It also requires developing local linkages (backward, forward, and lateral) where there are none, and strengthening them, where they exist, with the non-extractive sectors of the economy.
Extractive industries can provide the impetus for local economic growth through demand for local goods and services, as well as through the transfer of international business knowledge. Government can develop policies to increase access to opportunities for local supply of goods, services and labour.  It may also wish to protect local suppliers from global competition if they are not sufficiently competitive to supply the extractive industry. However, such measures should be temporary and linked to a defined plan for local suppliers to eventually compete on an equal footing.

Domestic participation in the extractive industries is now given high priority by host Governments through a wide array of policy instruments.  Local content legislation is one of the methods resource-rich countries can employ to increase the benefits from resource extraction to their economies, beyond securing revenues through royalties, taxes, and shares.  The aim is to enhance linkages with other sectors of the economy through local employment opportunities, in-country spending and procurement of local goods and services, technology and skills transfer, and local participation through equity and management.
Ladies and Gentlemen,
The importance of ensuring that countries with emerging oil and gas industries are able to efficiently implement local content policies has been globally recognized.  Compliance with, and the implementation of, local content is the joint responsibility of companies and national Governments. Although the main responsibility for compliance necessarily rests with foreign investors, there is clear need for a collaborative effort from all stakeholders involved to achieve local content goals at all levels of an oil and gas project. 

National Governments cannot simply enact a policy, sit back and leave its implementation to the companies. Many policies already place an onus on governments to create an enabling environment implementation.  What is clear is that the value-add from local content will not happen overnight.  However, the long-term advantages of enhanced local development, alongside the empowerment of a generation to participate directly in their nation’s wealth of resource, are well worth pursuing.  The ultimate aim is to ensure that natural resources are not a curse but a blessing, bringing sustainable social and economic benefits within the oil and gas sector and the wider economy.

It is important to understand the trade-offs and pitfalls that the development of local content policies may entail. Their success largely depends on engagement and collaboration among stakeholders, and involves cross-sectoral, national, regional, and local considerations. It requires industry-wide collaboration and multi-stakeholders involvement. 
Ladies and Gentlemen,
Since the discovery of oil and gas in commercial quantities, many countries have attempted to put in place, policy and legislative frameworks to enhance domestic participation so that this new found wealth will benefit nationals and their economies as a whole. However, several challenges still hinder the realization of this goal. 

·        Extractive industries are capital intensive and therefore hire fewer employees compared with other industries. In addition, the requirements for the limited extraction jobs and related services are extremely technical, and the highly skilled labour force might not be available locally. 
·        Even non-technical jobs such as food production require a level of capacity that may not exist in the community. Local farmers often lack the capacity to meet the quality and quantity requirements for the company to use their produce.
·        Local businesses servicing the oil and gas industry require a sound capital base because of the capital intensive nature of the industry. However, many local companies may not be in the position to afford this.
·        Foreign companies have well established supply chain networks. They therefore prefer to deal with global suppliers or award major service contracts to specialized global firms.  They are reluctant to abandon these already established ties and deal with local companies.

It is my hope that these and other challenges in implementing local content will be discussed at the forum and suggestions given on how to address them. 

There is no easy solution to the challenge of enhancing domestic participation in the value chain.  I believe knowledge sharing through dialogue with government representatives, industry associations, supplier organizations, civil society organizations, development partners, and other relevant institutions is critical to success. I therefore trust that this forum will make a major contribution to broadening the understanding of these issues and bring together the stakeholders who must be part of this collaborative effort.

Ladies and Gentlemen,
Let me end here by once again thanking the organizers of this important event which I believe you will all find very useful. I wish you fruitful deliberations. I also look forward to hearing your conclusions and proposals and in particular your suggestions on ways in which the Government can play its role in maximizing domestic participation along the value chain.

I invite visiting delegates to find time and tour around Zanzibar, enjoy the views and historical areas within our Island.

I now have the honour to declare that, this Regional Roundtable officially open. 

I thank you very much for your attention.

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