The Bank of Namibia (BoN) has warned that Namibia risks missing out on the full economic benefits of its emerging oil and gas industry if it focuses solely on resource extraction rather than building downstream industries and local capacity.
BoN Governor’s Technical Advisor Romeo Nel said international experience shows that the majority of value generated by the energy sector comes from activities beyond production, including processing, manufacturing, logistics, services and skills development.
According to Nel, only about 25% of revenues generated by the oil and gas industry typically originate from upstream activities, while around 70% are created through downstream industries and value-added economic activity.
“This suggests that our focus should extend beyond fiscal measures to include local participation, local content development, value addition, beneficiation, and capacity building to ensure that the benefits of the industry are felt throughout the economy,” Nel said.
His remarks come as Namibia positions itself to become one of Africa’s newest oil-producing nations following a series of major offshore discoveries in the Orange Basin.
Nel said the country’s challenge is not simply attracting investment into oil production but ensuring that local businesses, financial institutions and workers are integrated into the broader value chain.
“Namibia stands on the edge of significant transformation with the emergence of a new economy driven by the oil and gas sector, which is expected to bring economic prosperity to all Namibians. This is a tall order that rests not only on the shoulders of national institutions but also on market players. We must work together to navigate the opportunities before us and ensure that ordinary Namibians, as well as local institutions, are not merely spectators in this emerging economy,” he said.
The central bank official stressed that the financial sector has a critical role to play in supporting local enterprises that can supply goods and services to the oil and gas industry.
His comments add to growing debate around local content, skills development and economic diversification as Namibia prepares for large-scale energy investments.
Industry observers have repeatedly warned that without deliberate policies to develop domestic industries, much of the economic value generated by the sector could flow to foreign companies and service providers.
