Ghana gas: Indigenisation saved Ghana $249m in 83 months

Since the implementation of the indigenisation policy by the Ghana National Gas Company (GNGC) in March 2017, the nation has reaped substantial financial benefits, saving a total of $249 million over a span of 83 months.

This policy, which commenced in March 2017, began yielding savings from April 2017 onwards, equating to $3 million saved each month.

The successful execution of this policy has been attributed to the strategic decision to replace Chinese expatriate engineers and technicians with Ghanaian counterparts at the Atuabo Gas Processing Plant in the Western Region and other pipelines.

By prioritizing local talent and expertise, the company has not only achieved significant cost savings but has also fostered the development of intellectual capital crucial for sustaining the growth of the industry.

The $249 million in savings accumulated over the course of 83 months underscores the effectiveness and sustainability of the indigenisation policy.

These funds represent a substantial financial boost for Ghana, providing resources that can be reinvested into critical sectors of the economy or used to address pressing national priorities.

Moreover, the indigenisation policy aligns with broader efforts to promote economic empowerment and self-sufficiency, as it demonstrates the capacity of local talent to effectively manage and operate vital infrastructure projects.

By harnessing the skills and capabilities of Ghanaian professionals, the Ghana National Gas Company not only achieves cost efficiencies but also contributes to the overall socio-economic development of the nation.

indigenisation policy

Looking ahead, the success of the indigenisation policy serves as a testament to the importance of investing in local human capital and fostering a conducive environment for indigenous participation in key sectors of the economy.

Shortly after assuming office as Chief Executive Officer (CEO) of Ghana Gas in 2017, Dr. Ben K.D. Asante, although appreciative of the tremendous work done by their Chinese partners, felt strongly that the time had come for Ghanaian engineers to take up the full operations and maintenance of the installed infrastructure.

Thus, he envisioned a gas infrastructure system operating under the full control of competent Ghanaian engineers and technicians.

With strong leadership and commitment, Dr. Ben Asante initiated steps and strategies to enable the Ghanaian engineers to take over the plants fully, thus terminating the O&M contract with Sinopec partners.

Relieving the Chinese of their duties implied that there ought to be a deliberate intensification of training and capacity building of the local engineers to give them the needed skill and confidence to run the plant.

As a first step, the CEO, Dr. Ben Asante, who has over 30 years of experience in gas processing and transportation systems and consulted for the company during the construction phase, initiated targeted and tailored training series for the local engineers depending on their strengths and job descriptions.

Also critical to the takeover was to ensure all operating manuals were transcribed into English Language for easy interpretation by operators.

In the first year of the O&M contract, Ghana Gas engineers were required to look over the shoulders of their Sinopec counterparts while they operated and maintained the plant.

This went on successfully for the first year, though it came with language barrier issues. By the time the first-year contract ended, Ghana Gas’ engineers were ready to take over some utility operations.

The second year of the contract was to see Ghana Gas engineers take the driving seats while their Chinese counterparts watched and directed.

Unfortunately, this was not the case on the ground. Before the second year phased out, Ghana Gas’ engineers had indicated strongly through various fora their ability to successfully take over operations and maintenance of the plant.

In what can be described as a tough decision and yet a legendary one, the new CEO of Ghana Gas on April 1, 2017 took a bold decision to entrust operations and maintenance of the early phase gas infrastructure into the hands of Ghanaian engineers.

Having achieved a fully Ghanaian manned company, it presented the opportunity to lessen the financial burden that came with hiring the Chinese expatriates and also allowed for some employment of some more Ghanaian workers, thus retaining and spreading the wealth generated from this vast national asset.

Cost savings/reduction in cost

The indigenization of the operations saw the change in hand of the driving seat of all assets owned by GNGC from SINOPEC to local engineers who had shadowed the Chinese and acquired the expertise in running the installed facilities.

At a point, the company had about 200 Chinese engineers working at the plant site.

This translated to a wage bill of approximately $3 million in salaries to these foreign counterparts on a monthly basis.

This colossal savings in the operational expenditure in the company’s finances provided a huge fiscal space for the company to channel such revenue into other productive and strategic areas of the company.

Increased standard of living

The indigenization drive championed by the CEO of Ghana Gas gave birth to an era of opportunities for the young local engineers in this nascent gas industry to position themselves for greater works.

The change also culminated in freeing up space for more manpower (local engineers) to be employed into the company. The increase in local employment meant a transfer of resources control from our foreign partners to indigenes.
The engagement of indigenes in economic activities directly translates to the ability to earn economic gains in the form of salaries and wages.

Local engineers formerly unemployed could now afford to support their livelihood and that of their families from the newly provided opportunity, thus good healthcare, education, and meals alike.

Employment

Before the drive of indigenization, GNGC contracted about 200 Chinese to operate and maintain all state-installed gas infrastructure.

With the advent of the drive coupled with the additions to the installed facilities, GNGC has offered about 1,000 jobs to permanent, contracted, and casual workers across the length and breadth of Ghana, thus contributing to the reduction of the unemployment rate in Ghana.

The company also believes in the use of local contractors for auxiliary services hence additional job creation for Ghanaians.