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 detrimental effects on other industries.
Namibia, along with other African countries, is emerging as an attractive oil and gas opportunity due to legislative changes that make the market more appealing.
Namibia’s partnership with the global community and local enterprises reveals a desire for an industrialised future by utilising its resources.
Namibia’s immense untapped resources and favourable investment climate are significant drivers of the sector’s future economic growth.
Namibia 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 neighbouring 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 investments (FDI) between 2021 and 2023.
Namibia can benefit from the experiences of other nations dealing with oil, gas and green hydrogen; avoid mistakes and gain knowledge for creating a successful and sustainable industry.
Considering this, Namibia is making significant investments in energy and the local labour force, using alliances with significant businesses to upskill employees.
Progress also requires investments 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 avoiding the 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 and global demand if capacity and production rise.
Considering that 9-10 billion people are predicted to inhabit the planet by the year 2050, this substantiates the need for more oil producers across the globe. This shows the oil industry is economically viable. As Namibia’s population ages and becomes more urbanised, we must recognise that the country will need more energy.
For the socioeconomic and economic domains, oil will therefore 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. The health, safety and environmental standards of the highly-specialised oil industry are very strict. 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 green hydrogen as well as oil and gas.
Over 300 Namibians have been given preference for training opportunities in the petroleum sector.
These skills will be crucial for the development of Namibia’s energy industry, as well as for passing them on to future generations.
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, I advice our ministers and the country’s economic advisors to, while we work to reform Namibia’s economy, 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.
Thus, we must maintain economic equilibrium to ensure all economic sectors are balanced to avoid dependence on the oil and gas industries, diversify economic endeavours, and maintain balance across sectors.
Implement appropriate national and economic strategies to ensure mining, agriculture and other essential sectors are not isolated, mitigating single-sector concentration risk.
Additionally, the discovery of oil and green hydrogen are major economic engines due to their transformational potential for the Namibian economy and the number of jobs that will be created.As a result, we can use these transitions to drive competitiveness and help Namibia 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.
Agriculture is the primary employer, and some argue it is nearly impossible to build the economy, export goods or produce anything without agriculture.
Therefore, without highly- qualified technical labour and advanced technological capabilities, no country has ever succeeded in achieving economic diversification as history demonstrates.
As a result, Namibia will never be able to realise its dream of becoming an industrialised country unless it adopts strong policies to address the economic issues that draw in investors, upholds the rule of law and the Constitution, and invests in human capital, particularly in technology education.It is important for us to understand that FDI, which comes from major players in the energy sector and associated disciplines, not only supports the growth of the oil and gas industry, but also accelerates economic growth in general by transferring technology and encouraging innovation.
Oil and gas revenue can be directed towards 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 will be capable of ensuring stable and long-term economic growth.
To this end, for this reason, 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.
By strengthening anti-corruption measures and ensuring all Namibians benefit from natural resource development, the government should encourage accountability and transparency.
Therefore, the government should make sure SMEs are fully integrated into these resources, and that foreign businesses collaborate with SMEs. This will arrest the jobless situation.
*Josef Kefas Sheehama is an independent business and economics researcher.