NAMIBISA recorded a higher Foreign Direct Investment (FDI) inflow during the third quarter of 2023, mainly due to equity injections for exploration activities as well as the uptake of intercompany loans.
FDI inflows rose to N$8.8 billion during the third quarter of 2023 compared to N$6.1 billion registered a year ago and N$10 billion in the second quarter of 2023. This is according to FDI Intelligence, which evaluates FDI and macro-economic trajectories of the top 50 destinations world-wide. FDI Intelligence identifies nations leading the way in FDI and macroeconomic growth as the world struggles with a patchy post-Covid recovery.
“Over the year, Namibia’s direct investment liabilities rose mainly due to equity injections for oil and gas exploration, and appraisal activities. Lower FDI inflows were observed on quarterly basis on account of a reduction in the uptake of intercompany loans extended to domestic subsidiaries operating in the mining sector as well as lower retained earnings by foreign owned entities,” stated Bank of Namibia in its quarterly bulletin last month.
Namibia announced its first-ever noteworthy oil discoveries off the coast by Shell and TotalEnergies in 2022. Once the commercial viability of these discoveries has been verified, these hydrocarbon detections have the potential to benefit the domestic economy with billions of dollars in revenue.
President Hage Geingob recently commented that Namibia anticipates specific results from the extensive offshore oil drilling this year. Government, in the meantime, has been assertive in ensuring the process of commencing with the domestic oil production is accelerated.
The CEO of the Namibia Investment Promotion and Development Board, Nangula Uaandja last year shared similar sentiments that Namibia’s FDI inflows have been increasing.
“In 2023, one significant deal completely blew away all the calculations. You can, therefore, already see where we will be in 2023. We have been a pioneer in luring significant projects. And they guide us in forging important ties with the European Union, Japan and Korea, among others, as a nation,” Uaandja said at the time.
According to the annual standouts watchlist for foreign direct investment, Cambodia is predicted to have the best investment momentum through 2024. Asia has done well in this year’s watchlist, with six Asian nations included in the top 10. The Philippines in second place, Iraq in fourth place, Kazakhstan in sixth place, Azerbaijan in seventh place, and India in tenth place.
Cambodia leads the watchlist overall. Only three African nations, Namibia in fifth place, Kenya in third, and Morocco in eighth, made the top 10. The only nation outside Asia and Africa to place in the top 10 is Serbia in ninth position.
FDI is defined as an investment made by a firm or individual in one country into business interests located in another country. This practice is considered an important driver of economic growth.