In order to attract local manufacturing in OGS products, implementation of a conducive policy environment is key. Countries need to focus on the following three key elements:
- Deliberate policies and regulations that promote local assembly or manufacturing, including:
- Import tariff rates and regulations should not put locally assembled or manufactured products from imported components at a disadvantage over the import of finished products.
- Quality certifications and testing of locally assembled and manufactured products should be transparent and easily enforceable.
- Making available infrastructure for local assembly and manufacture of OGS systems, such as special economic zones and industrial parks, transparent approval procedures and fiscal incentives to de-risk investment, such as exemption from taxes and duties and investment allowances. This is particularly important for attracting FDI.
- Supporting sufficient demand for locally assembled and manufactured OGS products provided they meet quality and price standards. This can be done by ensuring end-user financing, which is anyway crucial for the OGS sector, in addition to a government-led public procurement process or financial incentives, such as tailored results-based finance (RBF) for locally assembled and manufactured OGS systems.