A Measurement Device for Estimating Local Firm Capabilities in New Oil Producing Countries

About the Project

Natural Resource-led Development in New Producing Countries

Our project seeks to understand how natural resource extraction can drive inclusive economic growth in new producing countries. We are engaged in a multiyear multidisciplinary study with four objectives:

• Understand the human geography of new producing countries.
• Assess the magnitude of new discoveries and estimate direct fiscal impact.
• Understand how industry can be localized to create economic growth.
• Estimate spillovers and welfare impacts to society.

We recognize that policymaking in new producing countries is a complex process, and our project also seeks to understand the interactions of actors' interests that drive energy sector policies.

Our initial focus is on four countries – Kenya, Mozambique, Tanzania and Uganda – that expect to develop significant oil and gas reserves in the next 5-7 years. Through natural resource development, these countries hope to achieve middle-income economic status by 2030-2040. This project is conducted through close collaboration with leading think tanks and NGOs in Africa

Summary

I n this paper we present an overview of KAPSARC’s local content project, its methodological approach and objective. We describe a measurement device (questionnaire) used to quantify different features of local firms surveyed in Uganda. The data collected in these questionnaires provides essential information to help analyze the current state of local firms in Uganda as they gear up to join the oil and gas supply chain. We also comment on each section of the form explaining its purpose. The questionnaire is attached as part of this document in the Appendix.

The design of the questionnaire allows for a combined approach to examining local firms. On the one hand, it is based on selected basic requirements of the oil and gas industry, which companies must usually fulfill if they aspire to be a supplier. On the other, it also considers the local firms from a dynamic perspective, focusing on their potential to adapt and carve a role in the oil and gas supply chain. This perspective is centered on the concepts of innovation and absorptive capacity, which are increasingly considered when evaluating small and medium enterprises (SMEs) at the firm level.

The questionnaire was designed to be used in faceto-face interviews, which is usually recommended for surveys carried out in Africa. The document is relatively lengthy and is intended to be utilized in developing nations, although a few questions would have to be adapted to the characteristics of each country based on the level of development and exposure to the oil and gas industry.

The questionnaire includes five sections to make it more comprehensible. The data collected is extensive, allowing for a variety of analytical approaches.