Why EAC Integration is good for local content development in the oil sector

By Samuel Okulony

Last week, President Museveni delivered the State of the Nation Address to the 10^th Parliament and other dignitaries at the Serena Hotel Kampala. The president re-emphasised the significance of the oil industry to provide the much-needed revenues for fast track infrastructural development, innovation and re-echoed the good level of convergence in the East African integration.

The East African integration will bring a population of over 160 million people from the six states of Uganda, Kenya, Tanzania, Rwanda, Burundi and South Sudan. These countries are faced with one main and related challenge and that is of youth unemployment.  Uganda, for instance, is currently faced with worst unemployment rate in its historical context and finding jobs for her ever increasing youth population is paramount.

The integration of the East African Community and discovery of natural resources in within its borders will in one way or the other play a significant role in fast tracking infrastructural development and creating employment opportunities, especially for the youth.

In fact, the extractive industry is the new development opportunity for East Africa and must carefully be handled to avoid any externalities from happening.

These exciting and rather technical opportunities must be ring fenced for the local people at the expense of expatriates. This can be done with the operationalisation of the robust local content policy that provides for exchange of labour within the East African member countries depending on the level of expertise and experience.

Local content, therefore, is the extent to which foreign companies operating in the country procure products and inputs in the form of goods and services from the local economy. In the case of extractives, this can be inputs at different stages of the investment cycle such as exploration, feasibility phase, operations and decommissioning. Further, it can be through inputs of different kinds such as engineering services, maintenance, equipment, catering, security, transport, training, among others.

With a huge population base and versatile expertise of skills within East Africa region, the states can have diplomatic relations and allow free exchange of labour depending on the level of expertise each country may possess. For instance, if Ugandans do not meet the required minimum standards for welding services and Kenyans have, they should be allowed to work in Uganda and vice versa.

This can enable the retention of labour and build expertise within the East African Community that can later manage to exploit her natural resources fully.

By doing this, the opportunities can be kept locally and will strengthen the objectives of the East African integration and achieve its long-term targets as one body.

The writer is the programmes and research coordinator of the Africa Institute for energy governance