There is an increasing need to involve citizens in the management of resources in countries that have comparative advantage in certain sectors of their economies. In such nations and particularly in those jurisdictions where oil and gas are dominant natural resources, the involvement of the local communities and delivery of benefits to them have become a necessity that is mandated by law.

In relation to the oil and gas sector, local content which is generally known in Nigeria as the 'Nigerian Content', is defined as “the quantum of composite value added to or created in the Nigerian economy by a systematic development of capacity and capabilities through deliberate utilisation of Nigerian human, material resources and services in the Nigerian oil and gas industry”.

In Ghana, local content is defined as “the quantum or percentage of locally-produced materials, personnel, financing, goods and services rendered in the petroleum industry value chain and which can be measured in monetary terms”. In these two countries, the laws and regulations do not seem to compel companies operating in the oil and gas sector to insure their assets in the respective countries. What is emphasised is that insurance must be carried out through an insurance broker duly registered in the country.

Following the promulgation of the Nigerian Oil and Gas Industry Content Development Act, 2010, the National Insurance Commission in collaboration with the Nigerian Content Development and Monitoring Board (NCDMB) came up with a set of guidelines to ensure compliance with relevant provisions of the Act and other laws relating to insurance.

In implementing the provisions of sections 27 and 28 of the Petroleum (Local Content and Local Participation) Regulations, 2013, the National Insurance Commission (NIC) and the Petroleum Commission reached an agreement that mandates companies in the upstream petroleum sector to cede their insurance business to local insurers, in line with efforts to maximise the participation of local insurance companies in the oil & gas sector.

Despite the local content laws and regulations established in Nigeria and Ghana, insurance companies in Anglophone West Africa are yet to fully take advantage of the opportunity to effectively position themselves as major players capable of leading foreign firms in the underwriting of oil and gas business.

As a consequence of the high level of premium export emanating largely from oil and gas related risks, laws and regulations have been established to entrench local participation through graduated domestication of these insurances. The local content Insurance Regulation applicable to the oil and gas sector is a case in point.