8 - Local Content, Angolanização, and Sustainable Development in Angola

Summary

Angola has become one of the key cases for building both academic and popular understandings of the ‘resource curse’ hypothesis regarding what natural resources may mean for a developing country in Africa. After decades of underdevelopment and conflict in the face of massive resource wealth, local content policies represented a new approach to achieving petro-development. Although local content has been in place for decades, it has largely failed to increase the benefits accruing to the nation from its resource wealth, replace foreign-owned companies with indigenous ones, or replace expatriate staff with nationals. In the late 2000s and until the oil price shock of 2014, Angolanização was being pursued with new emphasis on existing policies within Sonangol and the Ministry of Petroleum and new cooperation between these bodies, the Angola Chamber of Commerce, and the international oil companies. Although government officials and industry insiders regularly forecasted a new law, stricter regulations and enforcement, and possibly even changes to the Production Sharing Agreements (PSAs), the country spurned the emerging trend in Africa by sticking to more informal mechanisms for local content development. In the end, the new local content push had some important successes, but has been unable to achieve significant employment or economic diversification.