Unveiling local content provisions in extractive sector laws in Cameroon Perspectives for sustainability of national livelihoods

Introduction

1.1. Context and rationale to the study

Africa is a top producer of several non-renewable natural resources in the world. Unfortunately, most of such extractives are exported without significant value-addition on the continent. The exploitation of extractives has created an “enclaved” sector that is poorly linked to the rest of the economy. It has failed to foster upstream, downstream and perhaps side stream and lateral investments that should promote a broad-based economic transformation, create opportunities and industries that add value to the primary commodities.
The adoption by African Heads of State of the African Mining Vision (AMV) in 2009 is seen as an important milestone in this direction. Indeed, the AMV as an African initiative is a clear demonstration of Africa’s desire to enhance the development of non-renewable natural resources and forge the continent’s development pathway. Hence, the initiative advocates for a transparent, equitable and optimal exploitation of mineral resources to underpin development and promote local processing and value addition of raw materials to build human, financial, and institutional capital that can outlast the exhaustible resources.
It calls for an improvement of the value chain and diversification of economies to reduce dependence on natural resources and in particular, resources from the extractive sector. Prompted by the boom in the mineral and oil commodity prices in the mid-2000s and by the sharp rise in the profits of resource companies while resource-rich countries remained poor, governments in countries such as Nigeria and Brazil began to set up local content requirements in laws and policies. Since then, local content policies have spread rapidly, often broadened to include value addition, and have now entered the agendas of most resource-rich countries. According to Mercedes E. Milam, what was once a “gentlemen’s agreement,” is now increasingly a binding constraint on resource companies. He has further underscored the evolutionary nature of local content policies and the role of knowledge with other countries in shaping what local content means, what works and what does not work and why.