Namibia may double its annual GDP development to eight per cent inside a decade and cut back its dependence on diamonds due to new offshore oil and fuel finds, in line with the southern African nation’s mining and power minister Tom Alweendo.
Alweendo’s celebration Swapo, in energy since independence in 1990, hopes the promise of riches from huge power discoveries up to now 5 years — which have lured TotalEnergies, Shell, Chevron, ExxonMobil and Galp to Namibia — will assist it win the November 27 election.
However dissatisfaction with the financial system amongst Namibia’s 3mn individuals has been rising, growing the danger for Swapo that it may lose its parliamentary majority as its fellow “liberation events” did in neighbouring South Africa and Botswana this 12 months.
“If these oil finds are developed to their potential, Namibia may simply double its GDP [growth]. And that’s enormous,” mentioned Alweendo in an interview with the Monetary Instances, when requested concerning the development fee.
“However the main focus for us shall be on how this useful resource may assist enhance the livelihood of the common Namibian.”
Alweendo — an influential chief of Swapo who in 1997 turned the primary Namibian governor of the nation’s central financial institution — cited the cautionary tales of Angola and Nigeria, which each found oil many years in the past, however which nonetheless endure from excessive poverty charges.
“Hopefully, Namibia has learnt sufficient classes from others. So, we plan to make use of these discoveries to create different financial alternatives, and we’ll insist on sturdy governance,” he mentioned.
Namibia’s authorities has confronted criticism over its lack of ability to handle unemployment of about 20 per cent and excessive inequality — second solely to South Africa — regardless of its diamond wealth.
Teresia Kaukuhowa, professor at Namibia’s College of Science and Know-how, mentioned different elections within the area this 12 months had been swayed by financial frustrations. “Namibia’s leaders ought to heed this sentiment and direct potential oil and fuel revenues in direction of inclusive insurance policies, comparable to labour-intensive job creation.”
Alweendo mentioned the federal government had made inroads into inequality, however not quick sufficient for a inhabitants that has doubled in three many years. He conceded this introduced a threat for Swapo.
“What we’ve seen in elections elsewhere in Africa this 12 months, it’s all concerning the financial system. Folks fear concerning the livelihoods and persons are not prepared to simply vote [for] a celebration as a result of his father did, and his grandparents earlier than that,” he mentioned.
He mentioned Namibia wanted to “fast-track” the oil and fuel finds — with manufacturing probably starting as early as 2027 — in order that the ensuing income might be handed on quickly. “All of us need fast-tracked oil and fuel developments,” he added.
Partially, that’s as a result of Namibia’s funds has taken a success from falling costs of mined diamonds, which till now supplied about half of the nation’s export earnings. Their worth has fallen as lab-produced diamonds turned extra frequent.
Paul Eardley-Taylor, southern Africa oil and fuel knowledgeable at Commonplace Financial institution, mentioned these discoveries had been vital sufficient to probably reshape Namibia’s financial system.
He mentioned power information group Wooden Mackenzie estimated they included 8.9bn barrels of oil equal, “which is sizeable”. “However solely 11 wells have been drilled up to now, so we may see that quantity enhance sharply within the subsequent few years,” Eardley-Taylor mentioned.
He cited Guyana in South America, which found oil in 2015 — seven years earlier than Namibia — and whose GDP grew 62 per cent in 2022 and 38 per cent final 12 months, with 42 per cent development anticipated this 12 months.
“Guyana represented the most important rising market offshore discovery in current occasions, however probably Namibia’s reserves might be even bigger,” he mentioned.
Eardley-Taylor mentioned Alweendo’s goal of fast-tracking manufacturing to 2027 was “not unattainable”, however would depend upon how accessible the oil is in shallower waters, and the pliability of laws.
Analysts say Namibia’s pure sources will play a giant position within the election.
“A number of Namibians really feel that, 34 years after independence, their lives haven’t improved that a lot economically, regardless of sources like diamonds and uranium,” mentioned political analyst Ndumba Kamwanyah. “Persons are sceptical that the brand new discoveries of oil and fuel, in addition to inexperienced hydrogen, will profit the bulk.”
The indicators for Swapo are ominous, he mentioned. within the 2019 election, Swapo misplaced its two-thirds majority for the primary time, whereas assist for late president Hage Geingob plunged from 87 per cent to 56 per cent. It misplaced additional floor in 2020 native elections.
This time Swapo has nominated Nandi-Ndaitwah Netumbo as president, who can be the primary feminine head of state.
“It’s attainable that Swapo should still win the election, but it surely won’t be a landslide. And if there’s no clear winner, and there’s a run-off, that may be dangerous information for Swapo,” mentioned Kamwanyah.
Namibia’s authorities additionally faces strain from environmental activists. The nation is wealthy in renewables, within the type of solar and wind.
“Ultimately, all of us need local weather justice,” mentioned Alweendo. “However is there any justice in saying to Namibia, don’t develop this discover, when different international locations have benefited from this [oil and gas] for many years? If Africa had been to monetise all its fossil fuels, it will nonetheless contribute lower than 5 per cent of worldwide emissions.”
