The discovery of vast oil and gas reserves by international companies TotalEnergies and Shell has catalysed a new dawn for Namibia. This is after Shell last week announced its fourth successive discovery, more than 270km off the coast in Namibia’s Orange basin after hitting pay dirt with a recently-completed exploration probe.
“These reserves, once fully appraised and eventually developed, will contribute meaningfully to our economy and will form a cornerstone in our strategy to alleviate unemployment and income inequality in our nation,” said Vice President Nangolo Mbumba last week.
Speaking at the Invest in Namibia session on the sidelines of the US-Africa business summit in Botswana, Mbumba noted Namibia’s energy sector has seen considerable advancements in recent times and has opened vast opportunities for investments and value chains that are awaiting to be exploited. Touching on renewable energy, Mbumba said Namibia’s unique geographical attributes place it at a significant advantage above many other countries.
“Our land is touched by the sun on average 300 days of the year and our coastline is blessed by constant winds. With the signing of the Feasibility Implementation Agreement with Hyphen Hydrogen Energy, to produce green hydrogen, Namibia is effectively harnessing our natural resources to contribute not only to regional energy equity, sustainability and security but also to the decarbonisation of our planet,” said the Vice president, adding that one of Namibia’s ambitions is to become the sustainable energy capital of Africa. Mbumba also told the gathering that Namibia offers trade and investment opportunities in multiple sectors beyond energy.
“From tourism, mining, agriculture and agro-processing, transport and logistics, amongst others, a key objective for Namibia is to leverage the existing capital-intensive industries to set the basis for productive diversification towards industries that can employ more people with higher capabilities and jumpstart the Namibian economy,” said Mbumba.
Also speaking at the same occasion, trade and industrialisation minister, Lucia Iipumbu noted it was befitting that this summit was being held in Botswana, one of the world’s fastest growing economies over the past decade. Commenting on Africa’s energy ambitions, Iipumbu noted that sub-Saharan Africa emits a tiny fraction of carbon dioxide emissions, just 1.9% of the world’s emissions.
Said Iipumbu: “Despite the sobering data as outlined above, it is important to outline our key resolves and recommendations to ensure a viable outcome in terms of integrating Africa fully into the global value chains framework whilst securing its role in the energy transition”.
She added that the creation of the African Continental Free Trade Area (AfCFTA) is Africa’s resolve to directly confront the very low intra-African continental trade.
“Competitiveness for Africa’s integration into global value chains also calls for frontloading digital capabilities that also support entrepreneurship. To this end, the recently launched Digital Transformation with Africa Initiative as a signature initiative of the US Strategy Towards Sub Saharan Africa is very much welcome,” Iipiumbu noted. She continued that despite Africa’s extremely low per capital carbon dioxide emissions, energy poverty is extremely high and renewable investment levels into Africa are not necessarily optimal.
“To this end, our USA-Africa cooperation should invest critically in the early stages of energy project development such as the renewable energy initiatives, with much attention and investment paid to project preparation and innovative finance that can support early-stage risk capital,” Iipumbu suggested.
The trade minister added that the theme of the US-Africa business summit of ‘Enhancing Africa’s Value in Global Value Chains’ needs additional corroboration in terms of the current context.
She pointed out that Africa’s role in global trade is growing and so much more at an accelerated rate over the past decade but that Africa still only accounts for 3% of global trade. In addition, Africa’s share of intra-continental trade is less than 13%, compared to close to 50% in North America, 53% in Asia and almost 70% in Europe.
“These sobering statistics have immense implications on the developing and integration of Africa’s value in global value chains. Dire implications are thus felt in terms of limited specialisation, economies of scale, competition and technology diffusion. These then feed into circular self-defeating mechanisms that continue to stall Africa’s ability to accrue much value into global value chains,” Iipumbu stated.