For over three years, local entrepreneurs desirous of servicing the oil sector have bemoaned the difficulties faced in accessing capital from the banking sector. In spite of their plight, Guyana’s draft local content policy makes no provision for a development fund to be established to help struggling businesses.
Guyana Standard found several countries that have ensured their local content policies, laws, and regulations, provide for such a fund.
The Nigerian Oil and Gas Industry Content Development Act (NOGICDA or Act) for example, allows for a Fund to be available for manufacturing, asset acquisition, contract financing, community contractor financing, and loan refinancing. At least eight Nigerian oil and gas service providers, according to the country’s plan, are able to access the fund bi-annually. (See Link for more details: https://home.kpmg/content/dam/kpmg/ng/pdf/tax/Updates-on-Nigerian-Content-October-2018.pdf)
Sierra Leone also has a Local Content Development Fund which is provided for in its robust legislation. According to the nation’s local content law, every operator or contractor is required to pay into the Development Fund, an annual training research and development fee as may be provided in the licence, permit, contract, concession, agreement or alliance partnership agreement. (http://localcontent.gov.sl/wp-content/uploads/2019/03/Local-Content-Agency-Act-2016.pdf)
Ghana has also put provisions in place to ensure local businesses have the support they need by ensuring that an Oil and Gas Business Development and Local Content Fund is established. That fund is used primarily for education, training and research and development in oil and gas. Sources of the fund include the contribution from Licensed Operators (at amounts specified in the applicable Petroleum Agreements), Oil and Gas Revenue, levies, grants and other support from Ghana’s Development Partners. The Ministry of Energy or the Ministry responsible for petroleum oversees the disbursement of the fund.