As Namibia positions itself at the forefront of a new era in niche energy, a rise in international interest continues to emerge. 

This week, Nigerian billionaire and industrialist Aliko Dangote paid a courtesy visit to President Netumbo Nandi-Ndaitwah. 

Such high-level diplomatic and investment engagements are not coincidental, but a manifestation of Namibia’s commitment towards energy security. 

Commensurately, Namibia’s commitment to energy can be traced in her national development framework. 

Among other things, oil and gas is one of them. 

At the global level, oil has been a crucial conduit of economic transformation through which the social and economic growth of top oil-producing countries, such as Saudi Arabia, Canada, Russia, the United States of America and China relied heavily on. 

On the African continent, Nigeria, Algeria, Angola and Egypt are quite familiar with this place. 

Several reports confirmed that Africa has considerable oil reserves and gas growing by over 25% and 100%, respectively, in the past twenty years. 

However, the petroleum resources are not equally distributed, with 38 out of 53 African countries being net oil importers, with high and volatile oil prices being a challenge for Africa. 

Another leak in the pipeline of oil-producing African countries is the ability to ensure sufficient, reliable and environmentally responsible supplies of oil at prices that reflect the fundamentals. 

Therefore, the petroleum resources in Africa represent an opportunity to be pursued by exporting countries and, in tandem, an obstacle to be tackled by importing countries. 

Breaking it down at home, Namibia is quietly assembling its armament for these energy frontiers. 

The question remains, is oil and gas discovery a blessing or a curse to Namibia like in many other failed states? 

Nevertheless, if progress is truly the goal, preparation and purposeful effort must precede the promise. 

Kavin Ngo stressed that “if you are not living the life you want to right now, you should be working to get there”. 

The trendy phrases about Namibia, such as the “green hydrogen hub, tourism investment opportunities, infrastructure development, diversification beyond mining, foreign direct investment growth – and lastly, oil and gas potential, in the past years have raised more hope.

 But I am not sure how many people contemplate the meanings of those words. 

These phrases are not used in Namibia but elsewhere in the world. 

Once used frequently without a signal of paradigm shift action becomes a catch-all buzzword or pipe dream, which can fade away because of the mismatch or failure of the environment by turning vision into reality.

Every industry has a certain framework, which is the guiding principle. 

The formulation of a framework is to outline objectives that are earmarked for the culmination of a particular goal in the future. 

That is to say, a good working framework is not a wishful desire or know-how, but an alignment of goals intended to reach a particular purpose or resolve certain challenges at a certain point at a predefined time interval. 

In as much, setting macroeconomic goals is about spending each day in the best way possible to fill the distance gap between now and a certain marked end interval in the future. 

Scope and making all meaningful calculations, defining the scope, and taking baby steps to get there are important. 

The formulation of a clear vision is the prime determinant of strategic planning. 

On a global scale, Namibia shares geological similarities with Guyana around offshore oil and gas exploration and green hydrogen potential. 

Guyana discovered oil reserves in 2015 and managed to push production from zero to over 350 000 barrels in less than a decade. 

But despite its production, the country has no refinery yet. 

In Africa, Nigeria is the leader in terms of oil refineries.

There may be some good lessons that Namibia can learn from in terms of funding, regulatory bottlenecks, import dependence and infrastructure settings. 

Overall, an oil refinery is so important before the kickstart of operation, as it will break the chain of exporting oil in raw form instead of the finished goods, which not only accounts for the country’s gross domestic product but also creates more employment opportunities in the whole value chain. 

Undoubtedly, it is a capital-intensive project, but the government needs to tick this box as a game changer for Namibia.

Namibia’s plan for the oil and gas potential projects will touch on all of Namibia’s macroeconomic environment too that will have unfamiliar dimensions and influences than other normal projects beyond the country’s boundaries. 

By relevant factors like direction, objectives, strategy and business model. 

Because of their commodity structure, most of the influence will be coming from the outer globe of the macro environment’s latitudinal lines. 

Currently, diamond and uranium are good examples, despite their good performance in the past year. 

However, building strong alliances and sensible plans in sophisticated industries such as oil and gas is imperative to consider factors that influence the successful implementation that yields a win-win for all. 

Other aspects of having a sustainable industry are sound corporate governance and government support. 

This aspect poses a significant challenge for the oil industry in many countries, particularly Iran, Libya and Venezuela – to mention but a few. 

Many failed to set up a solid business operation plan and failed to protect the interests of local content and tackle corruption. 

Consequently, they end up losing the vision and instead end up embroiled in issues such as conflict of interest, overexploitation of natural resources and mismanagement. 

Having an outstanding proposition of a good corporate governance policy that evolves with growth can take Namibia to the next level.

Another bottleneck is the lack of government support or will in refinery plant establishment. 

At the onset, the majority of Namibia’s exports are mostly low-complexity goods, including the new additions to its export basket. 

This includes minerals and certain agricultural goods such as diamonds, copper, zinc, fish, cattle and grapes. 

Despite the country’s export structure adding more products than its regional peers, the majority of them are related to the mining sector, which remains relatively low in complexity. That is where the hardest hit of transformation needs to take place. 

One cannot talk of oil and gas potential with the intention of addressing issues such as unemployment and energy security without raising an eyebrow above the drilling oil plant. Because some of these opportunities will be addressed through the supply chain process and value addition. 

As a country that is so serious about embarking on this journey, it really needs to scrutinise the external environment where these products will land to examine potential important environmental forces, their impact and influence, as well as develop a framework that is congruent and addresses some of the core issues that the nation is facing. If Namibia is truly serious about oil and gas investment at an industrial scale, it must first build its iceberg framework of substance and not skyscrapers of oil-fuelled dreams. 

*Tio Nakasole is an analyst at MONASA Advisory and Associates.