The development of the Namibian hydrogen economy could generate jobs across the hydrogen value chain and throughout the wider domestic economy. One of the major beneficiaries of these anticipated jobs is the ailing construction sector that is expected to grasp much of the employment to be created.
Green hydrogen commissioner James Mnyupe while giving his presentation at the ongoing European Union (EU)-Namibia business forum in Brussels, stated that by 2030, Namibia is expected to create about 280 000 jobs, and 600 000 jobs by 2040.
However, some analysts, believe these figures are greatly exaggerated. According to Mnyupe, by 2030, some 84 000 direct jobs would have been created, as well as 60 000 indirect jobs and 136 000 induced jobs. This is to total 280 000 gross new jobs overall. It is also anticipated that the construction industry will employ 30 000 people by 2030 and 60 000 people by 2040.
“Most direct jobs are expected to be in construction, business services, transportation, and durable manufacturing. Construction activities in terms of putting up wind and solar farms. Not everything about the green industrialisation agenda would require a degree in chemical or electrical engineering,” said Mnyupe who doubles as the Presidential economic advisor. According to the Namibia Statistics Agency (NSA) second quarter of 2023 statistics, the local construction sector registered a decline of 35.9% in real value compared to a decline of 24.6% registered in the corresponding quarter of 2022.
“The performance in the sector is mainly reflected in real value of government expenditure on construction that posted a contraction of 54.5% during the period under review compared to an improvement, albeit contraction of 2.2% in the corresponding quarter of 2022. The poor performance is mainly attributed to the reduction in government spending on construction related to engineering works,” reads the report.
Furthermore, Vision 2030 states that
Namibia should have a 2.3% unemployment rate by 2030. With less than seven years, Mnyupe stated Namibia should create about 370 000 to 400 000 jobs between today and 2030 to achieve this target.
The numbers
Namibia Revenue Agency (NamRA) commissioner Sam Shivute this week stated the construction sector’s total tax debt as of 31 March 2023 stood at N$2.6 billion. He released the figures on Tuesday at the stakeholders’ engagement session with the construction industry in Windhoek. The commissioner noted the construction industry is not only a significant contributor to the country’s economy but also a vital sector that drives infrastructure development and job creation. He added that NamRA is committed to supporting and working closely with the construction industry whilst strongly calling for tax compliance from the sector. However, he was quick to point out that people should put an end at declaring zero returns. “There is a culture where people are in business, and they have just been submitting zero returns. These people, both Namibian and multinational have been stealing from our future and from the State fund,” said Shivute.
Thus, he pleaded with culprits to come forth and make sure that records are in order because tax crime does not discriminate.
At the event, he added that the number of revised returns previously submitted as zero by the construction sector and revenue collected for 2023 financial year end in the category of value added tax (VAT) stood at 23 at a value of N$4 063 501, while for income tax is 15 returns at a value of N$7 134 425.
Sharing some more statistics, he stated there are 14 330 registered employers in the construction sector, 6 919 registered taxpayers employed in the sector.
Employment potential
Meanwhile, green hydrogen (GH) is anticipated to hold the most industrial potential to foster a meaningful structural transformation of the domestic economic base. And, to optimise labour prospects for ordinary Namibians emanating from the country’s ambitious GH plans, government must fortify its efforts to develop local skillsets to match emerging market demands. These sentiments were expressed last Friday during an Institute for Public Policy Research (IPPR) presentation themed “the Global Cost of Living Crisis from a Namibian Perspective”. The presentation by IPPR Research Associate, Kitty Mcgirr, noted that excess oxygen and electricity production from GH projects could be used to fill the gaps in domestic consumption demands. In the briefing paper, Mcgirr investigated how the cost-of-living crisis has affected Namibia and suggests strategies and reforms which could mitigate the impact on the most vulnerable.
Mcgirr pointed out that while recently discovered oil is projected to contribute more to Namibia’s fiscus, with huge revenues expected after 2030, green hydrogen could actually make a more sustainable contribution in terms of job creation and infrastructure development. She made this analysis based on an increasing number of recent foreign inflows that have been garnered on the back of oil exploration after significant oil discoveries earlier this year alongside large-scale investments in prospective green hydrogen and ammonia production. In his 2023 State of the nation address, President Geingob stated Namibia had experienced the ‘highest year-on-year growth’ in foreign direct investment since 2015 and during the first nine months of 2022.
“Beyond developing local technical expertise for the renewable energy sector, government should work to localise value chain linkages through targeted investment in adjacent sectors such as manufacturing and product assembling as well as the service sector in local economies such as Lüderitz which is set to host an influx of industrial workers when Hyphen becomes operational. It would also be beneficial for government to strengthen the legal framework governing the operations of the emerging green hydrogen industry,” Mcgirr stated in her presentation. -mndjavera@nepc.com.na