With extensive experience in Local Content Supply Chain Management in the Oil and Gas sectors, as well as in the telecommunications industry, Cristiana Paco Langa, Local Content and Procurement Manager at Grupo Paco, spoke with Profile to offer an in-depth analysis of the current Extractive Industry landscape in Mozambique.
During the interview, Cristiana also addressed the introduction and evolution of local content policies in the oil and gas sector, proposing solutions to the challenges and opportunities the country is facing.
Profile Mozambique: How would you describe the current state of the Extractive Industry sector in Mozambique?
Cristiana Paco Langa: The sector is in a phase of growth and diversification, with large-scale projects in natural gas, coal, and minerals such as graphite and titanium. The opportunities generated have had a positive impact on the national economy, especially in areas such as employment and infrastructure. At the same time, the sector faces significant challenges, including the need to balance economic development with social and environmental responsibility. The integration of sustainable practices, with a focus on environmental impact and local communities, is fundamental to guaranteeing long-term development.
Local content has become a central part of Mozambique’s extractive industry development policies. Multinational companies are encouraged to prioritize local suppliers and workers, promoting technical training and the development of local small and medium-sized enterprises (SMEs).
This practice is contributing to industrialization and the creation of a more diversified and self-sustaining economy. Digitalization and automation are trends that are gaining momentum, helping to improve operational efficiency and attract more international investment.
MP: In the midst of this scenario you’ve just described, what opportunities can or should the country exploit?
CPL: In the midst of the current Extractive Industry scenario in Mozambique, there are several strategic opportunities that the country can and should explore, such as the development of Local Capacities, as strengthening human capital through specialized training and technical education can transform Mozambique into a center of competence in the sector.
The country can explore training programs aligned with the needs of the industry, allowing the local workforce to participate more directly in projects of high technological complexity, the expansion of Local Supply Chains as Mozambique should foster the development of a local supply chain, supporting small and medium-sized enterprises (SMEs) to become qualified suppliers to the extractive sector.
This can be done through public-private partnerships (PPP’s) and incubation programs that facilitate access to financing, innovation and technical training, one of the biggest opportunities that the country should also explore is Local Content as a Competitiveness Factor, and the effective implementation of local content policies can attract more foreign investment, especially from companies looking not only to exploit resources, but also to contribute to the sustainable development of local economies.
The country can position itself as a regional leader by adopting innovative policies that prioritize social inclusion and local economic development.
MP: How is the country doing in terms of introducing local content in the oil and gas industry?
CPL: In terms of introducing local content in the oil and gas industry, Mozambique has made significant progress, but still faces challenges to consolidate this practice in a broad and sustainable way, one of the biggest challenges is the Participation of Local Companies, there are efforts to increase the participation of local companies in the industry’s value chains.
However, many local suppliers still struggle to meet the stringent technical and operational requirements of large international oil and gas companies. The development of training programs to increase the competitiveness of these suppliers is an area that continues to need attention. Several training and capacity building projects have been implemented to ensure that the local workforce can meet the demands of the oil and gas sector.
These initiatives are carried out by both the government and multinational companies as part of social responsibility and local content agreements. However, there is still a significant gap between the supply and demand of skilled labour, especially in specialized technical areas. In general, our country has shown progress in introducing local content in the oil and gas industry, but the road to full integration still requires continued investment in infrastructure, training and more effective support policies.
The success of this effort depends on cooperation between the government, multinational companies and the local private sector to build a sustainable and competitive value chain.
PM: The Local Content bill was submitted in 2019 to the Council of Ministers. It’s now 2024. Do you think it’s necessary to review its content?
CPL: In my opinion, the revision of the proposed Local Content Law submitted in 2019 to the Council of Ministers is essential, given the current context and the economic and social transformations that Mozambique has faced, especially in the oil and gas sector.
Therefore, there are several factors that justify this need, such as the changes in the Economic and Industrial Context, the oil and gas industry, as well as other relevant sectors, have evolved since 2019, new projects have started, the COVID-19 pandemic has had significant impacts on the global economy and on Mozambique.
In addition, reviewing regulations would allow policies to be adjusted to support the economic recovery and ensure that local companies can benefit fairly in the new economic conditions.
PM: What is missing to turn this theoretical potential into practical benefits for the communities living in the production zones?
CPL: Turning the theoretical potential of the Local Content Law into practical benefits for communities in production zones depends on a more strategic and integrated approach, such as Efficient and Sustainable Training, because one of the biggest challenges is to ensure that local communities have access to technical training that prepares them to work in the oil, gas and mining industries.
Currently, many of the communities living in the production areas lack qualifications and access to specialized training.
It is necessary for the government, in partnership with companies, to develop training programs focused on the specific needs of these industries, ensuring that local populations are more than just passive observers of economic development, supporting the development of local SMEs would allow local communities to see direct economic benefits, it is crucial that small businesses and local entrepreneurs are integrated into the value chains of large oil and gas companies.
MP: What investments do you think need to be made in order to increase oil and gas activities?
CPL: In order to increase oil and gas activities in Mozambique, it is crucial to make strategic investments in various areas. My opinion as a specialist in local content and procurement is based on a few points such as Technical Capacity Building, as significant investment must be made in developing a qualified workforce, technical training programs, partnerships with universities and technical schools are fundamental so that the local workforce can occupy technical and specialized positions in oil and gas operations, the development of Local Supply Chains, as encouraging the development of local suppliers so that they can meet the needs of the sector is crucial as it requires investment in incubation programs and financial support for small and medium-sized enterprises (SMEs).
Apart from ensuring that local content policies are implemented effectively, these investments can not only boost oil and gas activities, but also create a sustainable economic ecosystem, boosting the country’s industrial and social development.
Follow the interviewee’s professional career at the following link: Cristiana Paco Langa
