The Former Chairman of the Association of Oil Marketing Companies, Henry Akwaboah, says the government’s plans to aggressively implement a local content law on the downstream sector risk dwindling investor confidence in the country.
This follows some moves by the government to increase local participation in the space.
Henry Akwaboah says if this is not reviewed, it may have adverse effects on efforts to attract foreign direct investment into the country.
“We have to remember that all these multinational companies came at a time when Ghanaians did not have the financial resources and the capacity to operate the sector and to me, if many years down the line you’re now saying to these multinationals or foreign companies that Ghanaians have come of age, therefore, pack bag and baggage and leave the industry, we are really setting a bad precedence.”
The National Petroleum Authority (NPA) had earlier indicated a policy to exclusively reserve the importation, distribution, and sale of refined petroleum products in Ghana for indigenous companies.
Even though no specific time has been stated for its implementation, the NPA says it will be implemented progressively to allow foreign-owned Bulk Distribution Companies and Oil Marketing Companies to recover the full value of their assets.
Mr Akwaboah added that the move might trickle down and negatively impact other sectors of the economy if it isn’t properly managed.
“I think the government has to tread cautiously because this can have a serious backlash for all the foreign direct investment that we’ve been going out to campaign for, not just at government level but even at our individual levels as there are discussions about having people invest in the oil sector and other sectors. So we don’t have to send the wrong signal to the rest of the world that when you come and invest in Ghana, some years down the line you’re going to be asked to leave and give Ghanaians the chance.”