Namibia’s emerging oil and gas industry faces significant regulatory, institutional and financial governance weaknesses ahead of commercial production, despite the country having established a legal framework for petroleum exploration and development, according to the Institute for Public Policy Research (IPPR).
The IPPR’s November 2026 Namibia Oil and Gas Governance Readiness Index, titled Before the First Barrel, found that Namibia remains only partially prepared to manage the transition from offshore exploration to commercial petroleum production.
The assessment identified weaknesses in regulatory capacity, petroleum revenue management, licensing transparency, local content implementation, offshore environmental preparedness and corruption prevention.
The index assessed eight dimensions of petroleum governance using a five-point scoring system, based on publicly available evidence reviewed up to 31 October 2026.
Legal and regulatory frameworks received the highest average score of 3.27 out of five, while corruption prevention and integrity recorded the lowest score of 2.00.
Institutional capacity scored 2.29, licensing transparency and contract governance 2.40, revenue management and fiscal accountability 2.22, and environmental and social safeguards 2.53.
Local content and economic inclusion received 2.10, while public oversight, participation and transparency scored 2.11.
The findings come as Namibia’s offshore petroleum sector advances towards potential commercial development, increasing the need for regulatory institutions capable of overseeing exploration, field development, production and the management of petroleum revenues.
The IPPR identified the gap between existing petroleum legislation and its implementation as a central challenge, particularly in the disclosure of petroleum agreements, licensing decisions and beneficial ownership information.
The assessment also raised concerns about the capacity and independence of regulatory institutions as the government restructures upstream petroleum oversight around the Upstream Petroleum Unit (UPU).
According to the report, the Petroleum Affairs Directorate received N$9.6 million in operational funding during the 2025/26 financial year, while the UPU was allocated N$20 million in the 2026/27 national budget.
However, the UPU’s statutory framework remained pending as at 31 October 2026, raising questions about the institutional arrangements needed to regulate a potentially expanding offshore petroleum industry.
The report called for stronger regulatory independence, adequate funding, improved technical capacity and clearer coordination between institutions responsible for petroleum governance.
Revenue management was another major concern, with the IPPR warning that Namibia needed petroleum-specific financial controls before the commencement of commercial production.
These include mechanisms for monitoring payments by petroleum companies, managing state participation in upstream projects and overseeing petroleum-related borrowing, guarantees and contingent liabilities.
The report also recommended binding rules for the proposed Welwitschia Sovereign Wealth Fund, covering petroleum revenue deposits, withdrawals, investment oversight and independent auditing.
The assessment highlighted risks to public finances, citing projections from the 2026/27 Mid-Year Budget Review that government debt would reach N$201.7 billion, equivalent to 68.7% of gross domestic product, by the end of the financial year.
The IPPR recommended that petroleum-related borrowing and state guarantees be publicly disclosed and subjected to parliamentary scrutiny to limit fiscal exposure.
Offshore environmental preparedness was also identified as an area requiring improvement as exploration and potential field development activities expand.
Environmental and social safeguards received an average score of 2.53, with the report highlighting deficiencies in Namibia’s capacity to respond to major offshore oil spills.
The IPPR cited a November 2024 assessment prepared for the Global Initiative for West, Central and Southern Africa, which found that government oil-spill response equipment was largely obsolete.
The assessment also identified very limited Tier 2 response capacity and insufficient national Tier 3 capacity, raising concerns about preparedness for major offshore incidents.
Additional weaknesses were identified in cumulative environmental impact assessments, monitoring and enforcement.
On local content, the report acknowledged Cabinet’s approval of the National Upstream Petroleum Local Content Policy on 4 August 2026 as progress towards increasing Namibian participation in the petroleum industry.
However, the IPPR said the policy needed enforceable implementation measures, measurable employment and procurement targets, skills development programmes and transparent company-level reporting.
Local content and economic inclusion scored 2.10, indicating that further work was required to translate policy commitments into measurable economic opportunities for Namibian businesses and workers.
The report also raised concerns about transparency in petroleum licensing and contract governance, including fragmented disclosure of signed petroleum agreements and beneficial ownership information.
Public oversight, participation and transparency received an average score of 2.11, reflecting limitations in access to petroleum-sector information.
The IPPR noted that the Access to Information Act had not commenced by the assessment’s cut-off date of 31 October 2026.
Corruption prevention and integrity recorded the lowest score of 2.00, with the report identifying gaps in petroleum-specific safeguards, including verified asset declarations, politically exposed person disclosures and conflict-of-interest controls.
To address these weaknesses, the institute recommended publishing signed petroleum agreements and beneficial ownership information, establishing a public petroleum information portal and strengthening institutional oversight.
It also called for improved offshore emergency response capabilities, stronger petroleum revenue controls and greater transparency in licensing and regulatory decisions.
The IPPR further recommended that Namibia join the Extractive Industries Transparency Initiative (EITI) to strengthen disclosure requirements and multi-stakeholder oversight of the petroleum industry.
The assessment concluded that Namibia should prioritise governance reforms before commercial production begins, warning that increasing petroleum revenues and the financial pressures associated with major offshore developments could make institutional weaknesses more difficult to address once production is underway.
