2nd VRA local content stakeholders forum held in Accra
Stakeholders at a local content forum have called for a concerted effort to bring together the fragmented policies in the various sectors into a national policy to enhance participation of local businesses.
Besides, they said the delayed local content bill must quickly be passed into law to ensure that Ghanaian companies and institutions have the legal backing for its implementation.
The stakeholders were speaking at the second Volta River Authority (VRA) Local Content Forum held on the theme: “Promoting Local Content in the Power Utilities and Related Industries in Ghana – Achievements and Sustainable Initiatives.”
The Forum is designed to provide the guideposts in effort at promoting local content development in the power utilities and to set a number of actions that together constitute the elements of a policy for promoting local content in public infrastructure delivery as well as actions for increasing local content.
Mr Kweku Awotwi, Chief Executive Officer of the Volta River Authority, said much of the funding invested in infrastructure did not benefit local contractors and suppliers and hence the need to enhance local participation.
He said expanding the frontiers of local content would result in increased opportunities for local people to earn income through employment in the delivery of public infrastructure projects through procurement and provision of other services by local companies.
However, Mr Awotwi said to be able to create a level playing field where local companies could compete on an equal footing, the issue of donors tying their financial assistance for projects to the procurement of goods and services from their countries must be dealt with and resolved.
“Even when aid is not tied, some donor country firms involved in the provision of design services often specify their own national suppliers and products,” he said and added that the use of procurement could help eliminate the problem.
In addition to these challenges, Mr Awotwi said, local companies also faced high fixed cost of access, high cost of tender information and financial constraints, adding that for Ghanaian companies a major constraint to local contractors in winning contracts was access to capital.
Another inhibiting factor is tax concessions on imported materials and equipment concessions for foreign companies, which are denied the domestic contractors, especially those in the construction sector.
“The factors mentioned combine to ensure that providers of construction services from the developing countries including Ghana are often unable to compete for projects in their own home markets,” he said.
Dr Smart Yeboah, Director of Customer Services, Electricity Company of Ghana (ECG), said the ECG had been implementing local content for many years, encouraging and promoting the growth of local businesses.
For example, he said, over 60 per cent of treated wood poles in distribution networks had been supplied by local companies while all conductors and low voltage cables are also being supplied by local companies as well as energy meters.
Dr Yeboah said through this, the ECG had been able to guarantee employment and promote the expansion of these companies to enable them meet the demand in the West Africa sub-region.
He said local content was good, but a robust law needed as the current level of preference margin under the procurement law did not favour small and medium enterprises.