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- Backward Linkages (Supplying Extractives)
- Building the Capacity of Local Businesses
Building the Capacity of Local Businesses
At a Glance
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To build the capacity of local suppliers to meet extractive industry requirements and demand, governments may set up basic training and skill development programs, with or without private participation.
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Basic training will help suppliers understand the needs of local extractive industry sites, technical specifications, the tendering process, and how procurement decisions are made.
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Skill development programs may involve a company drawing on its own personnel to provide direct training for prospective suppliers or the community at large. This can be especially useful during the early development phases of a project.
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Skill development programs may focus on specific businesses that the extractive industry hopes to foster, or on all the businesses in a community.
Case Studies
- Anglo American Corporation's Zimele Enterprise Program (African Development Bank, African Natural Resource Center)
- Creating the Foundations for a Linkage Program in a Rural Setting: Lessons Learned from the Early Stages of the Ahafo Linkages Program in Ghana (International Finance Corporation, Newmont Ghana Gold Ltd.)
- Developing a Transparent System for Local Contracting, A Manual for Practitioners Based on the eProcurement Experience in Chad (International Finance Corporation, Esso Exploration and Production Chad, Inc.)
- Developing SMEs through Business Linkages: A Manual for Practitioners Based on the MozLink Mentorship Experience in Mozambique (Mozal Aluminum, International Finance Corporation)
- New Strengthening Private Sector Engagement in Oil and Gas (Extractives Baraza, Strathmore Extractives Industry Centre, African Development Bank)
- The Supplier Development in the Oil and Gas Sector of Kazakhstan (Paul Domjan)
Key Resources
Topic Briefing
Beyond facilitating connections between buyers and suppliers, there is often a need to build supplier capacity. To help supplies meet companies’ requirements—in terms of cost, quality, delivery time, and codes of conduct—capacity building programs may be developed by the public or private sector, or as a joint endeavor of the two. Basic training may include helping suppliers understand the procurement process and needs of a company, addressing questions such as: what procurement is, what it entails, what the extractive industry site needs, how often and who uses it, what tenders are, what technical specifications might be expected, and how procurement decisions are made.