The green shoots on the horizon for Namibia are amplified through efforts to develop a green hydrogen ecosystem, and the recent discovery of commercially viable oil reserves in the country. These are among the top projects for government to drive the economic growth for the year 2023.
In a world determined to find solutions to reduce global carbon dioxide emissions and to mitigate global warming, President Hage Geingob said Namibia holds the potential answer through green hydrogen. In this context, he stated the Namibian government has taken the lead together with national and international stakeholders to unlock the massive potential of green hydrogen.
During his annual New Year’s message, Geingob said the discoveries of potential giant oil reserves in the form of Graff and Venus reservoirs, offshore Namibia in the Orange Basin, near Lüderitz by Qatar Energy, Shell and TotalEnergies, are set to positively transform the economic landscape of the country and the wellbeing of the people.
These discoveries are ranked among the top 20 globally in the last decade. According to international experts, Wood Mackenzie, Namibia stands to receive N$500 billion in foreign direct investment (FDI) in this regard.
Furthermore, with an estimated production of 6.5 billion barrels of oil, President Geingob noted the discoveries could earn Namibia between N$60 to N$95 billion annually in taxes and royalties. It is estimated that the two oil projects will generate over 3 600 jobs at the peak of production and double Namibia’s gross domestic product (GDP) by 2040 to about N$636 billion.
Meanwhile, the Namibia Statistics Agency (NSA) third quarter GDP report stated the domestic economy expanded by 4.3% during the third quarter of 2022, slow growth, when compared to a growth of 5.6% posted in quarter three of the preceding year. The economy continued to remain in the positive trajectory for six consecutive quarters.
In the quarter under review, the NSA stated that domestic GDP in nominal terms, stood at N$50 billion, up by N$4.4 billion when compared to the N$45.6 billion registered in the corresponding quarter of 2021.
Geingob added: “Of course, further drilling work and evaluations are ongoing to determine the precise commercial viability of these finds.
However, the renewed interest means that Namibia can expect increased foreign and domestic direct investment inflows, not only into the gas and oil sectors but also into the broader economy, both in the short and medium terms. This bodes well for
the acceleration of our economic
He was quick to point out that Namibia is in discussions with friendly countries that possess a wealth of experience and policy know-how in the oil and gas sector to help beef-up domestic policies and regulations. In this way, Geingob added Namibia will not only escape the “resource curse”, but proudly take its place among the league of oil and gas rich countries that are successfully managing these resources for the benefit of their people.
The resource curse can be explained as a phenomenon where economies that are well endowed with natural resources experience less favourable development outcomes than their resource-poor counterparts.
Furthermore, the President stated government’s negotiations with Hyphen Hydrogen Energy have proceeded well and the implementation agreement is expected to commence in the first quarter of 2023, preceded by a feasibility study reported to be in the amount of N$2.4 billion.
Hyphen is the preferred bidder for Namibia’s first large-scale vertically integrated green hydrogen project.
“Thus, in the green hydrogen sector, the agreements we have signed and the foreign direct investment mobilised this year, bode well for 2023. Once funding gets deployed, jobs will be created, construction activity will commence and the plans we have so carefully laid out in this year will begin to bear fruit,” said Geingob as he urged Namibians to welcome 2023 as the year of revival and looking into the future with renewed hope and optimism.