The recent discovery of oil in Namibia’s offshore regions, particularly in the Orange Basin and the Walvis Basin, has sparked both domestic and international excitement.

With major oil companies like TotalEnergies, Shell and Galp showing keen interest, these discoveries signal a potential economic transformation to begin in 2025. 

As activities escalate, crucial questions emerge: who benefits from this newfound wealth, and how can these benefits be maximised?

Small and medium enterprises (SMEs) are vital to Namibia’s economic landscape. 

Globally, SMEs constitute about 90% of all businesses, and account for roughly 50% of employment (World Economic Forum, 2019). 

In developing countries, their contribution is even more significant, impacting up to 40% of GDP and 60-70% of formal employment (World Bank, 2019).

Furthermore, a report by the United Nations Conference on Trade and Development (UNCTAD) highlights that SMEs in developing nations play a pivotal role in exports, representing 18% of total exports. 

This contribution underscores the importance of integrating SMEs into global value chains to enhance their competitiveness and economic impact further (UNCTAD, 2017).

The discovery of oil presents a unique opportunity for SMEs to play a central role in the nation’s economic boom. 

However, leveraging this opportunity necessitates the construction of necessary infrastructure, and the enactment of robust local content policies. 

These policies are designed to maximise the participation of local businesses, labour and resources in the burgeoning industry, aiming to enhance local employment, fortify local suppliers, and ensure lasting benefits from natural resources.

Encouragingly, Namibia has begun to bolster its infrastructure to support oil drilling. 

Namport plans significant upgrades, exceeding N$2.1 billion, at its ports to accommodate both the oil sector and green hydrogen projects. 

Walvis Bay is poised to offer essential services like fabrication, welding and assembly to oil explorers (Energy, Capital & Power, 2024).

The Namibian government is proactively fostering a thriving oil and gas sector by promoting exploration, and supporting the development of related infrastructure.

This includes transportation, storage and potential refinery construction, thereby laying the groundwork for a robust industry. 

Additionally, there are concerted efforts for industry-specific training and capacity-building to prepare the local workforce for forthcoming opportunities (BizNews, 2024).

However, more needs to be done. 

Namibia can draw lessons from other oil-producing nations like Ghana, Angola and Uganda, where local content and capacity-building initiatives have significantly increased SME investments in the oil sector (Appiah et al, 2018).

To effectively participate in the oil and gas sector, SMEs require clear, actionable information on opportunities, ranging from basic supplies to specialised services like information and communication technology, as well as environmental management. 

Enhancing SME competitiveness necessitates policies promoting local content, financial incentives and access to training and technology. 

Addressing challenges such as limited finance, technical expertise and regulatory barriers through targeted interventions is essential.

The government and industry stakeholders are urged to develop comprehensive policies and legislative frameworks to support SME involvement, and foster local content. 

Financial aid and capacity-building initiatives are crucial – so is facilitating market access by fostering partnerships with larger companies.

The oil and gas industry, divided into upstream, midstream and downstream segments, presents varied opportunities for SMEs. 

The upstream segment includes exploration, drilling and production of crude oil, with opportunities for SMEs in services such as seismic surveys, drilling support and initial well construction. 

The midstream segment encompasses the transportation, storage and trading of crude oil, where SMEs can engage in pipeline construction, maintenance services and logistical support. 

The downstream segment involves refining crude oil into finished products and distributing these products to the market, offering opportunities in refining support, marketing and distribution services. 

By understanding and targeting these segments, Namibian SMEs can strategically position themselves within the oil and gas value chain, leveraging their strengths and capabilities to maximise their participation and benefits.

The empowerment of Namibian SMEs following these oil discoveries is not merely possible, but imperative. 

With appropriate policies, support and strategic initiatives, Namibia can ensure that its oil and gas sector becomes a cornerstone of sustainable economic growth, benefitting the entire nation for generations to come. 

This understanding of the oil and gas value chain is crucial for deriving maximum benefits from the sector, and pinpointing specific areas where SMEs can add value and drive comprehensive economic growth and development.

*Juliet Madamombe is an accomplished entrepreneur, business consultant and writer. She is currently pursuing a Doctor of Business Administration degree at the University of Namibia. E-mail address: jtmadamombe@gmail.com.