Namibia’s Oil and Gas Could Boost Economy Without Hurting Other Sectors

Although namibia’s oil and gas industry has the potential to boost the country’s economy, careful management and diversification are essential to ensure this potential is realised without hurting other industries.

Namibia’s partnership with the global community and local enterprises reveals a desire for an industrialised future by utilising its resources.

The country has begun to overhaul its regulatory structure and fiscal policies to attract investment and encourage economic growth through oil, gas and renewable energy.

This presents enormous opportunities for both domestic and international businesses.

Namibia boasts 11 billion barrels of oil and 2,2 trillion cubic feet of natural gas reserves, paving the way for enhanced exploration and production for neighboring countries.

This is supported by a report from the Bank of Namibia (BoN), which shows that the oil and gas sector generated N$33,4 billion in foreign direct investment (FDI) between 2021 and 2023.

Namibia can benefit from the experiences of other nations dealing with oil, gas and green hydrogen.

In light of this, Namibia is making significant investments in energy and the local labour force.

Progress also requires investment in human capital and resources. If no money is spent on local content, no matter how much money is invested, you will not see any progress.

Additionally, Namibia can enhance its oil production capacity by collaborating with internationally accredited oil and gas companies in the Organisation of the Petroleum-Exporting Countries (Opec), thereby becoming the fourth-largest oil producer in Africa.

Proper management of natural resources is crucial to avoid resource curse.

As an independent researcher specialising in economics and business, I beseech Namibians to take advantage of this fantastic opportunity.

Namibia can meet its domestic demand, as well as the global demand, if capacity and production rise.

Considering that about 10 billion people are predicted to inhabit the planet by 2050, this substantiates the need for more oil producers across the globe.

This shows that the oil industries are economically viable.

As Namibia’s population ages and becomes more urbanised, we must recognise that the country will need more energy.

For the socio-economic and economic domains, oil will be indispensable.

Therefore, we need to realise this is a long-term development. It should be highlighted that Namibia has a long way to go in terms of oil and gas expertise, so we must be willing to welcome the international community to share their knowledge and skills.

It requires a lot of capital and the infrastructure is costly. Namibia needs both experience and foreign direct investment in the industry to develop this infrastructure.

Moreover, it is commendable that Namibia has decided to send some of its young people to major in the green hydrogen, oil and gas fields.

Over 300 Namibians have been given preference for training opportunity in the petroleum sector.

While some young Namibians are sent to study in these fields at universities, others are sent to countries like Angola to gain real-world experience.

Furthermore, my advice to our ministers and the country’s economic advisers is that, while we work to reform Namibia’s economy, we must recognise that economic diversification is critical to protecting other industries.

We must recognise that the oil, gas, and green hydrogen industries will not provide all jobs, therefore we must maintain economic equilibrium to ensure all economic sectors are balanced.

To avoid dependence on the oil and gas industries, we should diversify economic endeavours and maintain balance across sectors and implement appropriate national and economic strategies to ensure mining, agriculture and other essential sectors are not isolated.

We have the opportunity to use this transformation to drive competitiveness and assist Namibia to achieve economic independence.

If successful, a strategy shift like this may generate enormous wealth for Namibia, while decreasing poverty and inequality and creating a more affluent future for all Namibians.

When it comes to economic diversification, agriculture is the foundation.

Without highly qualified technical labour and advanced technological capabilities, no country has ever succeeded in achieving economic diversification.

As a result, Namibia would never be able to realise its dream of becoming an industrialised country – unless it adopts strong policies that attract investors, uphold the rule of law and the Constitution, and invest in human capital, particularly in technology education.

It is important for us to understand that FDI comes from major players in the energy sector and associated disciplines, not only supporting the growth of the oil and gas industry, but also accelerating economic growth in general by transferring technology and encouraging innovation.

Oil and gas revenue can be directed to the Welwitschia Sovereign Wealth Fund, which is needed to improve citizens’ well-being in critical areas like infrastructure, healthcare and education.

Building a workforce that is competitive worldwide must be Namibia’s first priority as it develops its oil, gas and overall energy sectors.

The country would then be capable of ensuring stable and long-term economic growth.

I am urging our leaders to present a roadmap and implement any unfinished initiatives to speed up economic growth and create employment opportunities for our people, particularly the younger generation.

Strengthening anti-corruption measures and ensuring that all Namibians benefit from natural resource development, the government should encourage accountability and transparency.

Therefore, the government should make sure small and medium enterprises are fully integrated into these resources and that foreign businesses collaborate with them.

This would arrest unemployment.

• Josef Sheehama is an independent researcher specialising in economics and business.