Across the African continent an increasing number of countries are introducing local content regulations that include requirements for investing extractive industry companies (EICs) to procure goods and services from local suppliers.

These local content laws have typically also included requirements for local hiring and skills training for those directly employed by the EICs. For EIC procurement, the last decade has seen increasing regulations ranging from requirements for companies to submit local procurement plans, to percentage targets and lists of products that must be purchased from national suppliers.

However, generally such demand-side measures have not been accompanied by an equally weighted level of supply-side interventions to support local businesses and build their capacity.

This gap, as well as continued challenges across many host countries to meaningfully increase local procurement, has created a realisation that more proactive efforts are needed for enhanced supplier development programmes (SDPs).

Report by AfDB