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Local content in West Africa : challenges and advances
IGF Annual General Meeting
Geneva, October 2017
Page 2
Outline
Context
Challenges
Advances
Page 3
Supporting LC policy in West Africa
2009 2010 2011 2012 201520142013
Mali
Burkina F. / Ghana
Regional WA: Senegal /Guinea / Ghana
WALPIBurkina F. - Liberia
Côte d’Ivoire
2016 2017
Guinea
Burkina F. / Ghana / Mali / CI
World Bank & Kaiser EDP
Page 4
Gold
Bauxite /alumina
Iron ore
Mineral sands
Zinc
Manganese
Uranium
Phosphates
Diamonds
Copper
Coal
MAURITANIAMALI NIGER
BENIN NIGERIA
TOGOGHANA
COTE D’IVOIRE
LIBERIASIERRA LEONE
GUINEA
GUINEABISSAU
SENEGAL
Significant mining activity
Page 5
Mining company value-added
Kinross
Page 6
LC policies: international examples
Page 7
Challenging LC context
• Infrastructure
• Economic structure
• Skills / HR
• Capital / Financing
• Business environment
Page 8
Challenges: economic structure
Page 9
Challenges: skills / HR
Data from UNESCO Institute of Statistics, 2016
Page 10
Challenges: skills / HR
Data from Human Development Report 2015, UNDP
Page 11
Challenges: financing
Formal MSMEs
Data from IFC Enterprise Finance Gap Database (2011)
Page 12
Challenges: infrastructure
33.6032.14
25.05
19.84
17.91
15.06
12.3610.93
9.67
5.96
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
Mali Niger Senegal Benin CapeVerde
BurkinaFaso
Ghana Coted'Ivoire
Nigeria SouthAfrica
US
cen
ts p
er k
Wh
Data from Africa Infrastructure Country Diagnostic, AfDB
Electricity cost per unit, total (US cents per kWh)
Page 13
Challenges: infrastructure
Logistics Performance Index
Data from LPI 2016, World Bank Group
Logistics PerformanceIndex
Page 14
Challenges: business environment
Doing Business 2017 - SSADistance to Frontier scores
Doing Business 2017, World Bank Group
Page 15
1. Distinction in terms of
geography
2. Participation by
citizens
3. Extent of value-add taking
place locally
“Local-local”/“Localised”
National
Wider region
Ownership, management,
employment
Manufacturing or
delivering service locally
USING SPEND ON LOCALLY-REGISTERED FIRMS DOES NOT CAPTURE
THE TRUE SOCIO-ECONOMIC BENEFITS
Defining local
Locally-
registered
21.4%
47.2%
85.0%
Liberia
Burkina Faso
Brazilian mine
5.4%
4.6%
63.1%
20.0%
6.9%
75.0%
4.6%
3.0%
61.7%
Locally-owned
Local value add
and ownership
Local value add
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Defining local
Page 17
Some key principles for LC policy in WA
• Information sharing
• No universal approach
• Medium and long term
• Multi-stakeholder
• Involve subcontractors
Page 18
Practical guide (World Bank, 2015)
Page 19
Modules of the Guide (1 – 4)
Page 20
Modules of the Guide (5 – 8)
• Purpose: – Reduce investment risk in target markets– Orient local content support programs
• Feature: provision of market data (not otherwise available)
• Mechanism– Data analysis at BGR‘s Department for international
Cooperation and the German Mineral Resources Agency (DERA)
– Advisory services by intermediary agencies (Chambers of Commerce or authorities in host countries)
Modelling of mining procurement data (BGR, 2017)
BGR’s model: sample output
Local content in West Africa : challenges and advances
IGF Annual General Meeting
Geneva, October 2017