Interestingly, the Namibia Oil and Gas Conference displayed a high degree of concentration risk, which could harm Namibia’s economy due to its reliance on oil and gas. This is undesirable because it makes it difficult to track the performance of other economic sectors.

To encourage the necessary investments and build long-term resilience at this crucial juncture, I will demonstrate in this article why Namibia should not concentrate on a select few economic sectors, such as mining, oil, and gas, while ignoring others. I will further demonstrate how economic diversification can shape Namibia’s future mining, oil, and gas sectors if all sectors receive the necessary attention in terms of capital development. Certainly, Namibia’s oil and gas business is growing, serving as a foundation for the sector’s potential and growth. Considering more than 70% of Namibia’s imports come from South Africa, the two countries’ economies continue to be interwoven. This means that any unfavorable financial or economic occurrences in South Africa will immediately affect the Namibian economy. Namibia must recognize and handle its specific challenges to achieve truly broad economic development. 

As a result, policymakers must avoid repeating preceding economic setback caused by the country’s concentration on a single economic sector. To ensure a healthy and competitive market environment that benefits all stakeholders, governments, businesses, and consumers must understand the variables that influence industrial concentration and its repercussions.

About 13% of Namibia’s export revenue comes from mining, which also makes a substantial economic contribution to the country. This over-reliance has often left the country vulnerable to external shocks and fluctuations in the global oil price. 

It is anticipated that Namibia’s GDP will grow from 3.7% in 2024 to 3.5% in 2025 and then to 3.9% in 2026. The slower tertiary sector expansion and shortcomings in manufacturing were the primary drivers of the downturn. Potential disruptions to trade resulting from protectionist measures, a decline in diamond export revenue, and possible inflationary pressures stemming from ongoing geopolitical tensions. 

This highlights a significant weakness in Namibia’s economic trajectory, which is usually dictated by external variables. To grow its economy, Namibia must understand the risks of depending too heavily on a small number of commodities rather than balancing all sectors. 

This promise can be realised with the employment of appropriate approaches and investments in infrastructure, digital services, and agriculture. In addition to reducing imports, promoting domestically produced goods and services will increase GDP and create jobs. 

Additionally, the lessons learned from the trade war between the United States and China, as well as the sanctions imposed on Russia, are evident. Therefore, diversity, domestic capability, and strategic self-reliance are key to economic resilience. Namibia can develop a more resilient, inclusive, and self-sufficient economy that is better equipped to withstand the turbulence of international geopolitics by adopting these lessons. Although foreign countries and international corporations have made significant investments in exploration and production, the Namibian government is hopeful that these advancements will spur economic growth. Such enthusiasm, however, increases the likelihood of unfavourable outcomes, where a booming natural resource sector eclipses other vital industries. To avert it, Namibia must employ diversification measures that solidify all economic sectors.

Furthermore, this strategy of concentrating on a small number of industries to boost our economy may also result in contradictions because these large corporations from various countries, such as France, Portugal, and England, are using the comparative advantage approach, which holds that each country has a comparative advantage over the others in a particular industry. The Namibians will be living hand to mouth due to the unfavourable macroeconomic climate, which is further exacerbated by the country’s poor economic growth, inequality, high unemployment, and poverty. By the time Namibia found oil, its public institutions lacked strong checks and balances, aside from democratic accountability. Thus, the excitement surrounding oil and gas should not eclipse the importance of a balanced and sustainable approach to development. 

Moreover, while mining has generated significant riches, it has primarily benefited international companies headquartered abroad. Namibia intends to hold 10% of new mining projects on a free carry basis, forcing investors to invest as little as possible in the economy, as Minister of Industries, Mines, and Energy Natangwe Ithete has proposed 51% ownership in all new mining operations. Diamond production declined by 26% compared to the same period in 2023, with the sector’s share of overall exports decreasing to 10.5% from 12.9% the previous year. This decline follows Debmarine Namibia’s production reductions in 2024 and early 2025, which were targeted to reduce oversupply and stabilise global diamond prices. Namibia’s economic structure is unbalanced, as a significant number of its exports are derived from mining commodities. 

Going forward, the government will continue to gain from royalties, taxes, and revenue-sharing agreements with multinational oil corporations. Namibia’s oil wealth is said to impede economic diversification attempts and lead to an over-reliance on the energy industry. If oil earnings are not properly handled, the country risks becoming another resource-rich country with social instability and widening income disparities. 

Thus, in addition to oil and gas, other economic sectors should be tackled in order to create an estimated N$7.7 billion in government revenue per year while simultaneously meeting the expected 11 billion barrels of oil and 2.2 trillion cubic feet of gas. Given this setting, the Namibian government, oil, gas, and mining companies, as well as the realization NDP6 aims to increase processed mineral exports from 46.6% to 57% by 2030, must concentrate on diversifying the economy, enhancing the business environment, and luring foreign direct investment to manage the risks associated with economic sector concentration and seize opportunities. 

In doing so, they can guarantee the energy sector’s long-term viability and expansion, bolster Namibia’s overall economic growth, and generate a significant GDP contribution.

The end, Namibia must cease concentrating on a small number of industries and instead rebuild all economic sectors with more inclusivity in order to achieve strategies for long-term sustainability, making sure that the benefits extend beyond a small number of sectors. 

A diversified economy that supports all sectors while being conscious of the long-term risks associated with reliance on mining, oil, and gas must be the driving force behind Namibia’s development. 

Therefore, a solid case study on the lessons learned from Mozambique and other resource-rich countries highlights the importance of strong governance, transparency, and a sustained commitment to sustainable development.

*Josef Kefas Sheehama is an independent economic and business researcher.