Enabling Environments for Suppliers

At a Glance

The degree to which extractive companies utilize local suppliers is greatly influenced by the broader policy environment, and the strength of regulatory and governance institutions.
Policies and regulations can introduce distortions to competitive local supply networks, including long wait times to register a business, import duty exemptions, and other types of fiscal and nonfiscal measures that disadvantage local suppliers; laws that hinder access to talented labor pools; and lack of investment in education and skill upgrading.
Access to, and the quality of, domestic infrastructure also plays a significant role in the development of a local supply industry.

Case Studies

Key Resources

The Observatory of Economic Complexity

Backward Linkages (Supplying Extractives) Enabling Environments for Suppliers

This online reources offers a visualization of the product space for extractive industries. This includes on overview of various ...

Increasing Domestic Procurement by the Mining Sector in Central Asia

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Backward Linkages (Supplying Extractives) Enabling Environments for Suppliers

Backward Linkages (Supplying Extractives) Enabling Environments for Suppliers Infrastructure

This report provides case studies on Kazakhstan, Kyrgyzstan, and Tajikistan, and highlights how they are utilizing the mining sector as an ...

Creating an Enabling Environment for Private Sector Development in Sub-Saharan Africa

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Backward Linkages (Supplying Extractives) Enabling Environments for Suppliers

This report offers a broad overview of various policy approaches taken to encourage private sector development in Sub-Saharan Africa. Visit ...

Mapping the Oil and Gas Industry to the Sustainable Development Goals: An Atlas

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Backward Linkages (Supplying Extractives) Assessing Demand and Capacity

Backward Linkages (Supplying Extractives) Defining Local

Backward Linkages (Supplying Extractives) Local Procurement Policies, Agreements, and Requirements

Backward Linkages (Supplying Extractives) Measuring and Monitoring the Use of Local Suppliers

Backward Linkages (Supplying Extractives) Facilitating Linkages

Backward Linkages (Supplying Extractives) Building the Capacity of Local Businesses

Backward Linkages (Supplying Extractives) Enabling Environments for Suppliers

Jobs from Extractives Understanding the Job Needs of Extractives

Jobs from Extractives Assessing Employment Potential and Skills Gaps

Jobs from Extractives Strategies for Job Creation In Extractives

Jobs from Extractives Building Required Job Skills

Shared Use of Extractive Infrastructure and Resource Corridors Sharing Water

Shared Use of Extractive Infrastructure and Resource Corridors Sharing Water Understanding What is at Stake

Shared Use of Extractive Infrastructure and Resource Corridors Sharing Water Opportunity Assessment

Shared Use of Extractive Infrastructure and Resource Corridors Sharing Water Negotiating Points

This resource examines the links between the oil and gas industry and the UN Sustainable Development Goals (SDGs), supporting a shared ...

Women’s Economic Empowerment in Oil and Gas Industries in Africa

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Backward Linkages (Supplying Extractives) Assessing Demand and Capacity

Backward Linkages (Supplying Extractives) Defining Local

Backward Linkages (Supplying Extractives) Local Procurement Policies, Agreements, and Requirements

Backward Linkages (Supplying Extractives) Measuring and Monitoring the Use of Local Suppliers

Backward Linkages (Supplying Extractives) Facilitating Linkages

Backward Linkages (Supplying Extractives) Building the Capacity of Local Businesses

Backward Linkages (Supplying Extractives) Enabling Environments for Suppliers

These guidelines serve as a practical policy tool to increase women’s economic empowerment in African countries through increased ...

Women’s Economic Empowerment in Sub-Saharan Africa: Recommendations for Business Action

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Backward Linkages (Supplying Extractives) Assessing Demand and Capacity

Backward Linkages (Supplying Extractives) Defining Local

Backward Linkages (Supplying Extractives) Local Procurement Policies, Agreements, and Requirements

Backward Linkages (Supplying Extractives) Measuring and Monitoring the Use of Local Suppliers

Backward Linkages (Supplying Extractives) Facilitating Linkages

Backward Linkages (Supplying Extractives) Building the Capacity of Local Businesses

Backward Linkages (Supplying Extractives) Building the Capacity of Local Businesses Mentorship, Training, and Skills

Backward Linkages (Supplying Extractives) Enabling Environments for Suppliers

Jobs from Extractives Understanding the Job Needs of Extractives

Jobs from Extractives Assessing Employment Potential and Skills Gaps

Jobs from Extractives Strategies for Job Creation In Extractives

Jobs from Extractives Building Required Job Skills

This policy brief examines barriers to women’s economic empowerment in Sub-Saharan Africa, with the aim of mobilizing private sector ...

New Strengthening Private Sector Engagement in Oil and Gas

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Backward Linkages (Supplying Extractives)

Backward Linkages (Supplying Extractives) Building the Capacity of Local Businesses

Backward Linkages (Supplying Extractives) Enabling Environments for Suppliers

Backward Linkages (Supplying Extractives) Enabling Environments for Suppliers Ease of Doing Business

This research paper analyzes small and medium enterprises (SMEs) in Uganda and Kenya’s petroleum industry and observes their capacity ...

New Local Content Policies in the Mining Sector: Scaling up Local Procurement

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Backward Linkages (Supplying Extractives)

Backward Linkages (Supplying Extractives) Defining Local

Backward Linkages (Supplying Extractives) Local Procurement Policies, Agreements, and Requirements

Backward Linkages (Supplying Extractives) Local Procurement Policies, Agreements, and Requirements Government Regulations and Contractual Agreements

Backward Linkages (Supplying Extractives) Facilitating Linkages

Backward Linkages (Supplying Extractives) Building the Capacity of Local Businesses

Backward Linkages (Supplying Extractives) Enabling Environments for Suppliers

This paper, part of the wider Local Content Guidance released by the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable ...

Topic Briefing

Beyond efforts to build and strengthen local business capacity, and interventions to connect extractive companies and local businesses, policy makers would do well to consider how the broader policy environment and domestic infrastructure support local purchasing by extractive companies.

As a starting point, policy makers may identify distortions introduced by policies or regulations into an established, competitive local supply industry, including long wait times to register a business, import duty exemptions, or other types of fiscal and nonfiscal measures that create a disadvantage for local suppliers; laws that hinder access to a talented labor pool within and outside the country; and lack of investment in education and skill upgrading opportunities. These potential deterrents are the focus of the World Bank’s Ease of doing business index, which ranks countries’ performance in this area.

In addition to policy coherence and efforts to strengthen local businesses’ chances to participate on an equal footing with foreign companies, access to and quality of infrastructure have a significant effect on the development of a local supply industry. For example, if electricity is unreliable and/or expensive, this results in increased production times and costs for businesses. Local suppliers will be forced to pass these additional costs through to their buyers, thus affecting their competitiveness. Infrastructure needs vary across businesses. But they often include reliable access to water and electricity, information and communication technology, and transport.