By Josef Keas Sheehama
Namibia’s oil and gas industry holds significant promise for boosting the country’s economy, but careful management and diversification are essential to realizing this potential without harming other sectors.
Namibia, alongside other African nations, is emerging as an attractive opportunity for oil and gas investments due to recent legislative changes that make the market more appealing. The country’s partnership with the global community and local enterprises reflects a strong desire for an industrialized future that leverages its natural resources. Namibia’s immense untapped resources and favourable investment climate are significant drivers of future economic growth in the sector. To attract investment and stimulate economic growth through oil, gas, and renewable energy, Namibia has begun overhauling its regulatory structure and fiscal policies. This initiative presents enormous opportunities for both domestic and international businesses. The country boasts 11 billion barrels of oil and 2.2 trillion cubic feet of natural gas reserves, paving the way for enhanced exploration and production that could benefit neighbouring countries. According to a report from the Bank of Namibia (BoN), the oil and gas sector generated N$33.4 billion in foreign direct investments (FDI) between 2021 and 2023.
Namibia can learn from the experiences of other nations dealing with oil, gas, and green hydrogen to avoid mistakes and gain knowledge for creating a successful and sustainable industry. Significant investments in energy and the local labour force, alongside alliances with major businesses to upskill employees, are crucial. Progress requires investments in human capital and resources; without spending on local content, no matter the investment amount, progress will remain elusive.
By collaborating with internationally accredited oil and gas companies in OPEC, Namibia can enhance its oil production capacity and potentially become the fourth-largest oil producer in Africa. Proper management of natural resources is crucial to avoid the resource curse. As an independent researcher specializing in economics and business, I urge Namibians to seize this fantastic opportunity. With increased capacity and production, Namibia can meet both domestic and global demand. With a population estimated to be between 5 and 6 million, and considering the global population projection of 9–10 billion by 2050, there is a substantiated need for more oil producers worldwide, demonstrating the economic viability of the oil industry. As Namibia’s population ages and urbanizes, the country will require more energy, making oil indispensable for socioeconomic development.
Recognizing this as a long-term development is essential. Namibia has much to learn in terms of oil and gas expertise, so welcoming international knowledge and skills is crucial. The industry requires substantial capital investment and costly infrastructure. Strict health, safety, and environmental standards are fundamental. Namibia needs both experience and foreign direct investment to develop this infrastructure.
It is commendable that Namibia is investing in its young people by offering opportunities to major in green hydrogen, oil, and gas. Over 300 Namibians have been given training opportunities in the petroleum sector, acquiring crucial skills for the development of the energy industry and future generations. While some are studying these fields at universities, others are gaining real-world experience in countries like Angola.
My advice to our ministers and economic advisors is that while reforming Namibia’s economy, we must recognize the critical importance of economic diversification to protect other industries. The oil, gas, and green hydrogen sectors will not provide all jobs, so maintaining economic equilibrium to ensure balanced development across all sectors is essential. To avoid dependence on the oil and gas industries, Namibia must diversify its economic activities and implement national strategies that support mining, agriculture, and other essential sectors, thereby mitigating the risk of over-reliance on a single sector.
The discovery of oil and green hydrogen presents major economic opportunities due to their transformational potential and job creation capacity. These transitions can drive competitiveness and help Namibia achieve economic independence. A successful strategic shift could generate enormous wealth, reduce poverty and inequality, and create a more prosperous future for all Namibians. Agriculture, as the primary employer and foundational sector, is vital for economic diversification and development.
No country has ever achieved economic diversification without a highly qualified technical labour force and advanced technological capabilities. Namibia must adopt strong policies to attract investors, uphold the rule of law, and invest in human capital, particularly in technology education, to realize its industrialization dream.
Foreign direct investment (FDI) from major players in the energy sector not only supports the growth of the oil and gas industry but also accelerates overall economic growth by transferring technology and fostering innovation. Oil and gas revenue can be directed towards the Welwitschia Sovereign Wealth Fund to improve citizens’ well-being in critical areas like infrastructure, healthcare, and education. Building a globally competitive workforce must be Namibia’s top priority as it develops its energy sectors to ensure stable and long-term economic growth.
To this end, I urge our leaders to present a clear roadmap and implement unfinished initiatives to accelerate economic growth and create employment opportunities, particularly for the younger generation. Strengthening anti-corruption measures and ensuring that all Namibians benefit from natural resource development, the government should promote accountability and transparency.
Additionally, the government should ensure that SMEs are fully integrated into these resource sectors and that foreign businesses collaborate with SMEs to address unemployment.
