Building the Capacity of Local Businesses
At a Glance
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.
Basic training will help suppliers understand the needs of local extractive industry sites, technical specifications, the tendering process, and how procurement decisions are made.
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.
Skill development programs may focus on specific businesses that the extractive industry hopes to foster, or on all the businesses in a community.
- 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)
Creating the Foundations for a Linkage Program in a Rural Setting: Lessons Learned from the Early Stages of the Ahafo Linkages Program in Ghana
This resource analyzes the initial stages of the Ahafo Linkages Program and offers guidance on how to create a local procurement unit within ...
This report illustrates ways to extract value from extractive projects using corporate initiatives to promote small and medium enterprises. ...
This resource examines the links between the oil and gas industry and the UN Sustainable Development Goals (SDGs), supporting a shared ...
These guidelines serve as a practical policy tool to increase women’s economic empowerment in African countries through increased ...
This case study focuses on several means of developing backward linkages between oil companies and local firms in Kazakhstan, creating a ...
This policy brief examines barriers to women’s economic empowerment in Sub-Saharan Africa, with the aim of mobilizing private sector ...
Developing a Transparent System for Local Contracting, A Manual for Practitioners Based on the eProcurement Experience in Chad
This manual aims to provide step-by-step guidance on effectively introducing a transparent system for local contracting. The eProcurement ...
Developing SMEs through Business Linkages: A Manual for Practitioners Based on the MozLink Mentorship Experience in Mozambique
This resource outlines how to create competitive small and medium enterprises (SMEs) that can be integrated into the supply chains of large ...
This research paper analyzes small and medium enterprises (SMEs) in Uganda and Kenya’s petroleum industry and observes their capacity ...
This paper, part of the wider Local Content Guidance released by the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable ...
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.
Beyond a detailed understanding of the procurement process and how to participate in it, training efforts can focus on building skills. Often a company can draw on its personnel to provide training for prospective suppliers or the community at large. This can be especially useful during the early development phases, when the project impact and training budgets are smaller.
Supplier development and enterprise development are two different concepts. The first includes businesses from which the extractive industry site procures goods or services, while enterprise development generally applies to all businesses in a community. Some companies include their suppliers when referring to “enterprise development,” while others only refer to businesses they support that are entirely independent of their supply chain (such as “alternative livelihoods” community investment programs).
In subsequent subtopics, training, mentorship, and finance will be covered in more depth.