There is an increasing need to involve citizens in the management of resources in countries that have comparative advantage in certain sectors of their economies. In such nations and particularly in those jurisdictions where oil and gas are dominant natural resources, the involvement of the local communities and delivery of benefits to them have become a necessity that is mandated by law.
In relation to the oil and gas sector, local content which is generally known in Nigeria as the 'Nigerian Content', is defined as “the quantum of composite value added to or created in the Nigerian economy by a systematic development of capacity and capabilities through deliberate utilisation of Nigerian human, material resources and services in the Nigerian oil and gas industry”.
In Ghana, local content is defined as “the quantum or percentage of locally-produced materials, personnel, financing, goods and services rendered in the petroleum industry value chain and which can be measured in monetary terms”. In these two countries, the laws and regulations do not seem to compel companies operating in the oil and gas sector to insure their assets in the respective countries. What is emphasised is that insurance must be carried out through an insurance broker duly registered in the country.