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Home / Editorial - Namibia must avoid the resource curse

Editorial - Namibia must avoid the resource curse

2023-03-10  Staff Reporter

Editorial - Namibia must avoid the resource curse

Earlier this week, the National Petroleum Corporation of Namibia announced a third oil discovery with its partners Shell and QatarEnergy in the Jonker-1X deepwater exploration well, in the Orange Basin offshore southern Namibia.

Data is being evaluated and further drilling is planned to determine the size and potential of the discovery, Namcor said.

Since last year’s two discoveries, offshore Namibia has become a hotbed for oil and gas exploration with the planet’s biggest players in that industry clamouring to confirm commercially viable oil.   

But many Namibians are apprehensive and well aware of the resource curse that continues to haunt many developing nations driven by an insatiable thirst for energy to keep their economies running. Due to this craving, many powerful countries often behave in an unbecoming manner. 

Rich nations have a history of bullying oil-rich countries, often for their own economic interests and gain. This has been evident through colonialism, resource extraction, and political intervention. The negative consequences of this behaviour have included the displacement of indigenous populations, environmental degradation, and political instability. 

The resource curse is a complex challenge that requires a multifaceted approach to overcome. Namibia can avoid it by establishing strong governance frameworks, investing in people, promoting economic diversification, and prioritising environmental sustainability to ensure their natural resources contribute to sustainable economic development and promote the well-being of their citizens.

Where this curse is prevalent, profits generated from resource extraction rarely benefit local populations, who are often left with limited job opportunities, degraded natural environments, and social unrest.

Countries rich in natural resources such as oil, gas, or minerals often fail to translate their wealth into sustainable economic development, and instead suffer from a range of negative consequences including corruption, economic instability and environmental degradation. Developing countries, in particular, are vulnerable to the resource curse, as they lack the institutional capacity and regulatory frameworks to effectively manage their resource wealth.

However, there are several ways Namibia can avoid the resource curse to ensure natural resources contribute to sustainable development. 

One way is to establish strong governance frameworks that promote transparency and accountability in the management of natural resources. This can be done by creating independent oversight bodies and enacting laws that promote transparency in the awarding of contracts and the collection of revenue.

Another important step is to adequately invest in people, including education and training, to build the technical capacity needed to effectively manage natural resources. 

This can help to ensure that the benefits of natural resource wealth are shared equitably among all the citizens and that the economic benefits of resource extraction are not squandered.

Additionally, Namibia can leverage natural resource wealth to attract foreign investment and promote economic diversification with a serious emphasis on local capacity building and adhering to local rules and laws as well as a focus on the development and uplifting of the communities where these resources are exploited. 

Namibia should, aggressively, prioritise environmental sustainability and responsible resource management to ensure natural resources are not depleted or degraded over time. 

Too often, foreign mining outfits have been allowed to ignore environmental and water regulations and disrespect cultural sensitivities as they “create jobs and opportunities”. 

The promotion of sustainable practices in resource extraction and management is of utmost importance.

The Sovereign Wealth Fund is an important tool and if managed correctly, will ensure the economy is protected from price fluctuations that are part and parcel of the oil industry. Spending controls will also ensure the country’s economy does not become oil-dependent. 

This would also prevent labour in the country from pivoting to only oil production, which will not be sustainable in the medium to long-term.


2023-03-10  Staff Reporter

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