Namibia’s economic outlook is poised for a major uplift following the discovery of oil and gas reserves, with the country on track to achieve its first fiscal surplus since 2008 by the early 2030s, according to projections by S&P Global Market Intelligence.
Speaking at the Namibia International Energy Conference, economist Robert Mathee of S&P Global Market Intelligence said the anticipated boom would largely be driven by foreign investment in the energy sector and its broader economic impacts across multiple industries.
Mathee explained that Namibia’s fiscal deficit, which currently averages around 3% to 4% annually, could see a major turnaround.
“If we take the current government revenue and expenditure in US dollar terms and assume both grow by around 3% to 5% year-over-year, Namibia could generate its first fiscal surplus by 2032, based on oil production rates of about 280,000 barrels a day between 2032 and 2035,” he said.
The projected fiscal surplus, potentially amounting to billions of US dollars, would enable the Namibian government to accelerate debt repayment and reinvest heavily into infrastructure development.
“The revenue from oil royalties and taxes, combined with indirect economic benefits, will provide Namibia with the financial capacity to make substantial investments, particularly in its logistics and infrastructure sectors,” Mathee added.
Namibia has historically struggled to execute its infrastructure budgets effectively, with external risks often cutting into available revenues.
However, Mathee noted that the surge in oil and gas revenues could significantly alter this dynamic by the 2030s.
“The oil and gas revenues will be so significant by the 2030s that Namibia will have the resources to fund infrastructure projects, especially those that enhance the logistics sector, which remains a key area for growth,” he said.
Prior to the oil and gas discoveries, Namibia’s economic performance had been relatively subdued.
Mathee highlighted that between 2016 and 2019, the country’s GDP growth averaged less than 1%, significantly trailing the Sub-Saharan African average of approximately 4%.
“This sluggish growth was attributed to a variety of factors, including limited real fixed investment, which was contributing negatively to GDP. The COVID-19 pandemic and subsequent recovery marked a turning point for the country,” he said.
The discovery of oil and gas resources has already started reshaping Namibia’s economic trajectory. Mathee pointed out that 2023 saw a record influx of foreign direct investment (FDI) into the country.
“The oil and gas sector alone attracted massive investments, but other sectors also benefited from this new economic momentum. The increase in FDI has been a game-changer, with real fixed investment as a percentage of GDP rising dramatically, surpassing 30%, which is well above the Sub-Saharan African average,” he said.
Maintaining this high level of investment, Mathee stressed, is crucial for sustaining Namibia’s growth momentum, which has recently been running at around 3% to 4% per annum.
“Maintaining these high levels of real fixed investment will be essential to ensure continued economic expansion and prosperity,” he said.
Mathee also applauded Namibia’s diversified export profile, noting the country’s significant contributions from uranium, diamonds, gold, copper, and fish.
“This diversified export base has proven to be a key strength, allowing Namibia to weather global commodity price fluctuations more effectively than some of its neighbours, such as Angola and Botswana, which are heavily reliant on a single commodity—crude oil and diamonds, respectively,” he said.
He further commended Namibia’s resilience in the face of external shocks, including challenges such as the rise of lab-grown diamonds, saying it underscores the country’s ability to mitigate risks associated with commodity dependence.
