TANZANIANS have been involved in the discourse on how locals would benefit from the gas and oil industry.
ORTON KIISHWEKO interviews Neema Lugangira Apson, Supply Chain and Local Content Advisor at Smart Spending on how it can be achieved. Read on...
QUESTION: Can you tell us about yourself and Smart Spending?
ANSWER: I am a Supply Chain and Local Content Specialist with over 10 years of successful entrepreneurship experience.
I have been actively involved in providing advisory services to aspiring SMEs. I was awarded a Certificate of Quality by Kodak Ltd UK for Emerging Markets.
I have recently completed a detailed and thorough action-orientated research titled, "Local Supplier Development in the Tanzania's Proposed LNG Supply Chain" leading to my being internationally and locally known as Tanzania's local content specialist.
Although not an employee of Smart Spending, I serve as the Supply Chain & Local Content Advisor to Smart Spending in efforts of seeing that my ambition of having local suppliers efficiently and effectively participating within the extractive industry supply chain is realised. Smart Spending Training & Consultancy Services Ltd known as Smart Spending was established in 2012 aiming to provide cutting-edge solution to the extractive industry; oil, gas, and mining sectors (OGM) within the supply chain management function.
Q: You have in the past called for starting of a Tanzania local content development and monitoring board. Can you expound on your motivation towards this thought?
A: Allow me to first give you some background as to why I came to this thought. Tanzania has an emerging oil and gas resources. However, the country is faced with an infant oil and gas industry which is envisaged to transform the country into a middle income country.
This will only be possible if there is a significant amount of financial resources that can be invested in the economy to stimulate the activities of the oil and gas industry. This circulation of financial resources will lead to multiplier effect hence contributing to the GDP growth of Tanzania.
It is a fact that the current local supplier base in Tanzania is yet to meet the standards of oil and gas industry despite the fact that it is a new industry in the country.
This situation calls for increased efforts by both government and the oil and gas industry to develop the local supplier base so as to ensure that locally owned firms can efficiently and effectively participate within the oil and gas supply chain.
On the basis of the foregoing, I believe that there is a need to ensure efficient and effective participation of locally owned firms within the oil and gas supply chain.
Q: Why do you think Tanzania should have a stand alone Local content Act and policy, for that matter?
A: Interestingly, I have already touched on background of the answer to this question in my answer to question no 2. A Local Content Policy and/or Local Content Act will serve as a guideline to the oil and gas industry.
The industry will come to terms with what is expected of them and they too will work towards ways of meeting those expectations.
Once a country enacts a Local Content Policy and/or Local Content Act, it becomes a legal requirement therefore it is no longer an option for the oil and gas industry to meet but a must.
This approach will totally transform the way in which the oil and gas industry will operate in Tanzania as well as create assurance for the way in which the country will benefit from this oil and gas industry.
In other words the Local Content Policy and/or Local Content Act will become like the Key Performance Indicators (KPIs) of the oil and gas industry. It will make it easy to measure and monitor the implementation of the same.
It will further make it possible to analyse and document the true local supplier development achieved. I decided to give my MBA Research Project the title, "Local Supplier Development in the Tanzania's Proposed LNG Supply Chain".
I was very fortunate that Statoil Tanzania endorsed my research problem and was able to start working on my MBA Research Project. I wish to take this opportunity to extend special thanks to Mr Arne Morken, Procurement Manager at Statoil who was my Company Thesis Supervisor.
End of June this year, I presented and defended my MBA Research Project in front of a Jury at the EIPM who highly recommended to consider publishing it into a book. This book will be available for free in different media formats.
I am currently seeking funding for this publication and I welcome all those who are seriously interested in joining hands with me in this noble cause. I strongly believe that this book will have a special legitimacy on the basis that it is entirely prepared by a Tanzanian. I am going to expand my MBA Research Project into a PhD.
Q: With regard to being involved in the supply chain in the oil and gas sector, how should locals utilise international company experiences.
A: They need to understand the oil and gas industry. Once they understand the industry, how it operates, what is required to be a supplier, they should then perform a self-evaluation to see how best suited are they currently.
Business owners need to be ready to change their way of doing business to fit to the needs of this oil and gas industry.
Q: In Tanzania's nascent oil and gas industry, what do you view as the role of small and medium enterprises (SMEs)?
A: It is first crucial for the oil and gas companies and their global services providers to understand that the fact that the oil and gas industry is a new industry in Tanzania, it will certainly attract new businesses being formed to serve this industry.
Now with the current pre requirements asking for at least 3-5 years business experience, how will these new start-ups become suppliers to the oil and gas industry?
Q: You have said that if local suppliers want to become suppliers to global players in Tanzania, they should strategically partner with expert firms out there. "It is after such partnerships that you (local companies) can pitch for jobs from global players. Expound on this.
A: Yes, one of the greatest challenges that SMEs have in developing countries especially in Africa is access to finance.
For start-ups or SMEs wanting to become local suppliers to the oil and gas industry need to find foreign companies in which they can partner create strategic partnerships with.
This is an inexpensive process that only requires for the local firm to prove its credibility as a strategic partner to the foreign company.
For example, Smart Spending was established in 2012 but if you go to the website www.smartspending. co.tz you will see that Smart Spending has established strategic partnerships with foreign companies who have many years of experience in serving the oil and gas industry.
Q: Your thesis, that you want to publish soon, has four main areas including raising awareness to oil and gas companies and their global service providers, what they can do and how they can arrange themselves to incorporate local suppliers in their supply chains. It also raises awareness on the opportunities available and what they can do to prepare themselves for these opportunities. What inspired this chapter?
A: My MBA Research Project was aimed to provide answers to the Problem which was in summary, "How can local suppliers efficiently and effectively participate within the LNG Supply Chain".
Although the oil and gas industry in Tanzania has many stakeholders, for purposes of my MBA Research Project, I focused on three key stakeholders: (1) Oil and Gas Industry (2) Local Suppliers (3) Tanzanian Government.
Tanzania has a 7 to 10 year timeline before the expected LNG production date between 2020 to 2022 calling for active preparations. Having the dissemination of my MBA Research Project to a wider audience will have a great contribution to these active preparations.
Q: Where will the industry be in the next 5-10 years regarding supply chain management?
A: If Tanzania wants to have locally owned firms efficiently and effectively participate within the oil and gas industry supply chain/LNG supply chain, it is imperative that local supplier development programmes for this industry need to start NOW.
Tanzania should aim to build a strong competitive local supplier base in fabrication yards, which is one of the most crucial requirements to this oil and gas industry. To achieve this Tanzania will need about 5 to 7 years.
Making reference to the 7 to 10 year timeline that Tanzania currently has what does this mean? It actually means that if this timeline is used properly it will actually have a positive impact to the country.
This is not a timeline which should be spent complaining but rather a timeline that should be spent on actively preparing ourselves and being proactive. It is estimated that the Onshore LNG Plant alone will cost around US $ 14 billion meaning that there will be a large amount of money circulating within the Tanzanian economy.
Q: I recognise you worked in some other desciplines prior to joining this sector. How did you generate an interest in pursuing a career in this area of the oil and gas industry?
A: Not many industries give purchasing and supply chain management the strategic value and importance it deserves but the oil and gas industry does just this. This was one of the reasons that attracted me to the oil and gas industry.
In all honesty, the fact that this was a new oil and gas industry, seeing the opportunities, challenges and potential economic transformation that this industry brings to Tanzania highly motivated me to want to be part of Tanzania's oil and gas industry success story.
My recently completed detailed and thorough actionorientated research titled, "Local Supplier Development in the Tanzania's Proposed LNG Supply Chain", has led to me being internationally and locally known as Tanzania's local content specialist.
I nonetheless, aspire to truly earn this recognition of being Tanzania's Local Content Specialist which will be through my contribution to this success story.