The discovery of oil offshore Namibia has highlighted the potential of transforming the nation’s economy and bringing home unprecedented opportunities for growth and development. 

As excitement builds around the prospects of tapping into these newfound resources, it is crucial for Namibia and Namibians to carefully position themselves to maximise the benefits while avoiding the pitfalls associated with the infamous resource curse.

The discovery of the “black gold” off the coast of Namibia has sparked optimism among policymakers, investors and citizens alike. With the potential to significantly boost government revenues, create numerous jobs for Namibians, and stimulate economic growth, the oil discoveries represent a unique opportunity for the country to diversify its economy and reduce dependency on traditional sectors such as diamond mining and agriculture. In fact oil revenue can also be used to boost sectors like agriculture to better yields.

Namibia has become a global exploration hotspot after offshore discoveries by oil majors, and it wants to accelerate the milestone of its first oil output.

The Mopane field is located in the Orange Basin, along the coast of Namibia, where Shell and France’s TotalEnergies made oil discoveries of an estimated 11 billion barrels of crude oil in 2022.

Galp said flows achieved during the tests reached the maximum allowed limit of 14 000 barrels per day, potentially positioning Mopane as an important commercial discovery.

Some people have touted it as potentially the world’s biggest-ever deep-water find. Namibians could benefit by preparing to provide other services to the oil and gas sector. While oil may only flow in 2030, a lot of legal, environmental, and building infrastructure must be done in the meanwhile.

 Oil accounts for a large percentage of the world’s energy consumption, and when the oil finally flows, the entire industry, including upstream, midstream, and downstream activities, must be occupied, sustainably managed, and regulated by Namibians for the benefit of Namibia.

While Namibians might not yet have the skills and resources to fully participate in the exploration process, there are thousands of different kinds of products that can be made from oil, and the extraction industry has several layers where workers and entrepreneurs could enter the stage, including future exploration, extraction, refining, transportation (often by oil tankers and pipelines), and marketing of petroleum products.

If we do not want our raw materials to leave our shores unprocessed, we, Namibians, must insist on being involved in the beneficiation process. 

Petroleum is the raw material for many chemical products, including asphalt, lubricants, ink, cosmetics, waxes, pharmaceuticals, solvents, fertilisers, pesticides, synthetic fragrances, and plastics.

Namibia’s draft National Upstream Local Content policy aims to increase local participation across the petroleum sector’s value chain, from technology transfers to helping train skilled workers and enhancing job creation in a country where unemployment and poverty are high, according to the World Bank.

Namibia expects to finalise its policy on local participation in the oil and gas sector by year-end, energy minister Natangwe Ithete said this week, as the country looks to industrialise and share economic benefits with its people.

To reap maximum results from the oil discoveries, Namibia must adopt a strategic and holistic approach that prioritises sustainable development, transparency, and good governance.

 One key step Namibia can take is establishing a comprehensive legal and regulatory framework that governs the extraction and management of the country’s oil resources. This framework should include clear guidelines on revenue management, environmental protection, local content requirements, and the rights of indigenous communities.

Namibians must now prioritise capacity building and skills development to ensure we are equipped to take advantage of job and business opportunities created by the oil industry.

Investing in education and training programmes that focus on relevant skills such as engineering, geology, and environmental management will not only benefit individuals but also contribute to the long-term sustainability of the country’s oil sector.

In addition to maximising the economic benefits of the oil discoveries, Namibia must also guard against the potential pitfalls of the resource curse. History has shown that many resource-rich countries have struggled to translate their natural wealth into sustainable development, often falling victim to corruption, conflict, and economic instability.

To avoid the oil curse, Namibia must prioritise transparency and accountability in the management of its oil resources. This includes ensuring contracts with oil companies are negotiated fairly and openly, that revenues are effectively tracked and managed, and that there is robust oversight of the industry by independent regulatory bodies and civil society organisations.

Ultimately, Namibia’s success with its oil discoveries will depend on its ability to strike a delicate balance between maximising economic benefits and safeguarding against the risks of the resource curse. By adopting a forward-thinking and inclusive approach that prioritises sustainable development, transparency, and good governance, Namibia can pave the way for a prosperous future fuelled by its newfound oil wealth.