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The Extractive Industries and Society
journal homepage: www.elsevier.com/locate/exis
Original article
Enterprise development? Local content, corporate social responsibility and
disjunctive linkages in Ghana’s oil and gas industry
Austin Dziwornu Ablo
Department of Geography and Resource Development, Box LG 59, University of Ghana, Legon, Ghana
ARTICLE INFO
Keywords:
Local content
Corporate social responsibility
Enterprise development
Political settlement
Oil and gas
Ghana
ABSTRACT
The government of Ghana, in partnership with various Multinational Oil Companies (MNCs), implemented an
enterprise development project for the oil and gas industry. The government framed the project within a context
of Local Content Policy (LCP) while MNCs approached it as a Corporate Social Responsibility (CSR). Both LCP
and CSR initiatives have become essential strategies deployed by stakeholders to mitigate, among other things,
the enclavity that characterises natural resource extraction across Africa. A disjunction between LCPs and CSRs
undermines the success of projects deployed to enhance linkages in the extractive industries. This paper ex-
amines the Enterprise Development Centre (EDC) project and argues that the divergence in conceptualisation
and processes informed by LCP and CSR perspectives affected the content, strategies and impacts, and led
to/contributed to the collapse of the EDC. There was a lack of understanding between stakeholders on in-
terests and strategy, coupled with limited alliance-building based on value co-creation, which led to the failure
of the EDC project. Better engagement between stakeholders is needed for such projects to engender value co-
creation which is central to their successful implementation to promote positive development outcomes from the
oil and gas industry.
1. Introduction
Sub-Saharan Africa (SSA) is a growing oil and gas hub, gaining
grounds as an essential player in the global energy matrix (Ackah-
Baidoo, 2012; Carmody, 2016). A significant feature of African
economies, however, is the mismatch between natural resource ex-
traction and development. The extant literature (Auty, 1994;
Humphreys et al., 2007; Karl, 2007; Sachs and Warner, 1995) places
emphasis on weak governance regimes, corruption, volatility of the
global commodities market, weak institutions and conflicts among the
major causes of the resource curse – the negative relationship between
natural resource extraction and development.
Africa’s extractive industries tend to exist as enclaves disconnected
from national economies (Ackah-Baidoo, 2012; Ferguson, 2005). Thus,
little or no benefit trickles down to local and national economies from
resources extraction (Ferguson, 2005). This disconnection between
extractive industries and national economies underlies many of the
resource-related conflicts that have plagued the Africa continent. In-
deed, as Obi (2010) contends, the class relations and subordination of
the African continent in a global political economy where minimal
benefits accrue from resource extraction to African countries accounts
for the resource curse. Oteng-Ababio (2018) in a study of Takoradi,
Ghana’s oil city, found that indigenes expressed a feeling of
disconnection from the oil and gas industry and contended that while
the ‘the money is counted in Accra’ the oil is drilled near them. Whether
perception or reality is that the extractive industries are de-linked, not
only from national economies but also from local communities where
resources are found and extracted.
Various strategies have been initiated by governments to counter
the prospect of the extractive industries producing limited positive
development outcomes for societies. Fast gaining relevance are Local
Content Policies (LCPs) that seek to promote the use of local personnel,
goods and services in the extractive industries value chain beyond the
direct contribution of resource extraction in the form of revenue re-
ceived by governments (Ablo, 2015, 2016, 2017, 2018; Klueh et al.,
2007; Ovadia, 2016a, 2016b; Ramdoo, 2015; Tordo et al., 2013).
Multinational Corporations (MNCs) also deploy Corporate Social Re-
sponsibility (CSR) initiatives to gain the needed social license – the trust
of communities to minimise the risk of any social uprising that might
stem from the limited trickle-down of resource benefits to society. Es-
sentially, LCPs and CSR initiatives have become essential strategies for
addressing the potential enclavity of the extractive industries and re-
ducing the risk of conflicts while fostering linkages between resource
extraction and national economies.
Since 2010, Ghana has been producing oil from its Jubilee Oil field.
Between 2010 and 2018, several new oil and gas discoveries have been
https://doi.org/10.1016/j.exis.2019.09.003
Received 23 October 2018; Received in revised form 13 September 2019; Accepted 19 September 2019
E-mail address: aablo@ug.edu.gh.
The Extractive Industries and Society xxx (xxxx) xxx–xxx
2214-790X/ © 2019 Elsevier Ltd. All rights reserved.
Please cite this article as: Austin Dziwornu Ablo, The Extractive Industries and Society, https://doi.org/10.1016/j.exis.2019.09.003