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How Namibia can avoid the oil curse

2022-12-12  Eveline de Klerk

How Namibia can avoid the oil curse

Eveline de Klerk

WALVIS BAY - Namibia needs to build competent and accountable institutions to manage oil revenue and minimise the risk of corruption by closing all legislative loopholes in order to avoid an oil curse.

This is according to Rosita Ndumbu, a research associate at the Institute for Public Policy Research (IPPR), who was speaking at an anti-corruption conference held in Walvis Bay last week.

Two major oil discoveries by TotalEnergies and Shell were made during the first quarter of 2022 offshore Namibia.

The importance of the discoveries lies in the massive amounts of recoverable resources, which has renewed interest in exploration activities in the region. Also called the Dutch disease, the oil curse basically occurs when the discovery of large oil reserves harms a country’s broader economy, instead of having a positive impact.

Touching on the risks in the oil and gas sector during her presentation, she said just because Namibia discovered oil does not mean that all the country’s problems will be resolved.

She highlighted Angola and Nigeria as case studies which are currently battling socio-economic challenges, despite being some of the biggest oil-producing countries.

An estimated 11 billion barrels in oil reserves have been found off Namibia’s coast, with the first production anticipated within four years. This finding could put Namibia on par with Angola, whose reserves are estimated to be around 13 billion barrels, and whose production rivals Nigeria.

“It is no secret that Namibia is one of the most unequal countries in terms of wealth distribution, and we should not expect all our social and economic challenges to be resolved overnight. A classic example is what is happening in Angola and Nigeria,” she reiterated.

Over 200 000 people lost their jobs because of the Covid-19 pandemic, a situation that worsened the unemployment rate in the country.

Hence, she said it is very key that oil and gas become the economic drivers of this country. It can make a massive positive impact, and revenue generated from it can really make a diffidence for a small country such as Namibia, Ndumbu added.

“There is, therefore, a need for law reform, and government should amend relevant petroleum legislation to close all loopholes to prevent conflicts of interest and unrest,” she said.

She then recommended that government look at the current legislation, and join international anti-corruption bodies to promote transparency initiatives. This will allow government to align itself with international standards which will assist in identifying and minimising corruption, as well as avoid possible social unrest in the future.

Also speaking on the same platform, IPPR researcher Frederico Links highlighted the impacts of corruption within public institutions, saying that they lack transparency and accountability. As a result, ordinary Namibians suffer. According to him, it is clear that corruption is not only linked to the fishing sector, but boils over to other sectors such as mining and the oil and gas sector.

“People need to see people being held accountable in the public, but it’s not happening. Disciplinary hearings should not be held in secret. People need to see something is happening to corrupt officials,” he stressed.



2022-12-12  Eveline de Klerk

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