Former Bank of Namibia Governor and former Minister of Mines and Energy Tom Alweendo has called on Namibia’s financial sector to position itself for the country’s emerging oil and gas industry, warning that the economy will forgo significant value if local banks remain on the sidelines.
Addressing a Bank of Namibia seminar on preparing the financial sector for a sustainable oil and gas economy, Alweendo said Namibian banks have an opportunity to finance businesses that will support the industry, even if they are not directly funding offshore exploration and production.
He said while international capital will continue financing large upstream projects, local financial institutions should play a greater role in supporting supplier development, infrastructure and service industries linked to the sector.
“That is why the financial sector matters. Not because local banks must finance everything; they cannot. Not because they must take exploration risk; they should be careful. Not because they must replace international capital; they will not. But because banks and other financial institutions can help turn contracts into companies, companies into employers, employers into taxpayers, and taxpayers into a stronger nation,” he said.
Alweendo said opportunities exist for local banks to provide supplier and contractor finance, working capital facilities, foreign exchange services, infrastructure finance and participate in syndicated lending arrangements for larger projects.
He warned that Namibia’s oil discoveries alone would not guarantee economic transformation without a financial system capable of supporting local participation.
Alweendo also urged local businesses to strengthen their governance and financial management if they hope to secure contracts in the sector.
“The call for local participation is not enough. Companies must become finance-ready. They must have proper accounts, governance structures, safety systems, credible management and the ability to deliver under demanding contracts. Oil and gas procurement is unforgiving. The industry will not lower global standards because a company is local,” he said.
Alweendo said a successful oil and gas industry would generate investment opportunities beyond offshore operations, including logistics, housing, training institutions and specialised service providers.
He also called on policymakers to provide greater regulatory certainty by clarifying taxation, procurement rules, environmental obligations and dispute resolution mechanisms.
Alweendo said the Bank of Namibia can support the industry’s development by guiding financial institutions on prudential standards, foreign currency exposure and systemic risks while helping create conditions for responsible local financing.
