During the third quarter of 2022, foreign direct investment into Namibia recorded a higher inflow, mainly due to equity injections for exploration activities as well as the uptake of intercompany loans.
Foreign direct investment (FDI) into Namibia rose to N$6.1 billion during the third quarter of 2022 from N$1.7 billion and N$3.8 billion recorded in the corresponding quarter of 2021 and the previous quarter, respectively.
“The higher foreign direct investment (FDI) inflows were mainly due to equity capital for exploration activities, following the offshore oil discoveries as well as the acquisition of shares by non-residents in entities in the mining sector,” stated Bank of Namibia (BoN) in its quarterly bulletin last month.
Namibia announced its first-ever noteworthy oil discoveries off the coast by Shell and TotalEnergies last year, and once the commercial viability of these discoveries has been verified, these hydrocarbon detections have the potential to benefit the country’s economy with billions of dollars in revenue.
In addition, a bourgeoning local oil industry holds the potential to create unique business opportunities for the country’s economic development through the establishment of a new sector that could provide much-needed jobs.
BoN further noted that FDI inflows were also supported by higher uptake of intercompany loans extended to domestic subsidiaries operating in the mining sector.
Moreover, on an annual basis, FDI inflows were to a great extent supported by reinvestment of earnings by some corporates in the mining sector on the back of increased profits during the review period.
FDI is an investment made by a firm or individual in one country into business interests located in another country. It is considered an important driver of economic growth.
CEO of the Namibia Investment Promotion and Development Board Nangula Uaandja last year shared similar sentiments that promoting Namibia at this point is a very easy task due to new developments the country has confirmed, such as green hydrogen and recent oil discoveries.
At the time, she noted Namibia has secured about N$94 billion worth of investment opportunities with the potential to create 122 000 jobs. This was in a significant pipeline
used, which was described as active
investments.
She said this momentum has placed Namibia at the forefront in the international arena. The NIPDB CEO added Namibia is experiencing a significant increase in investment inflows that are knocking at the country’s doors as global businesses search for unique opportunities to invest in.
“Now is the time for Namibia to devise solutions through various stages of project implementation on how to support investment opportunity drivers, regardless of whether these are local or foreign direct investments,” said Uaandja.
– mndjavera@nepc.com.na