Namibian SMEs face significant financing constraints that could limit their ability to compete for contracts in the country’s emerging oil and gas industry, with access to funding emerging as the leading concern during nationwide consultations on the proposed upstream petroleum local-content policy.
SME financing and local-content funding ranked first among eight recurring concerns raised across all 14 regions during consultations on the National Upstream Petroleum Local Content Policy (NUPLC).
The concerns come as Namibia seeks to position local companies to participate in petroleum supply chains and compete for contracts from international oil companies and their contractors as offshore exploration advances towards potential development.
Deputy Director for Compliance, Regulations and Local Content Charles Mbeha said the issues raised during the consultations were ranked according to their prominence, with financing emerging as the biggest concern.
The funding challenge is expected to be critical for local companies seeking to meet the financial, technical and operational requirements associated with supplying the upstream petroleum industry.
Equitable benefit-sharing and regional inclusion ranked as the second-biggest concern, followed by skills development, training and education.
Employment opportunities and fair labour practices ranked fourth, while local procurement and supplier participation ranked fifth.
Transparency, governance and enforcement, Namibian ownership and meaningful participation, and domestic value addition and industrialisation were also identified among the major concerns.
Mbeha said many of the issues raised during the consultations are already reflected in the proposed policy but require greater clarity, while more detailed requirements will be addressed through regulations.
“You don’t want to be too specific in the policy. You do that later on when you focus on the policy and ultimately the regulations,” he said.
The policy is expected to provide the framework for increasing procurement from Namibian companies and expanding local participation in petroleum supply chains.
Minister of Industries, Mines and Energy Modestus Amutse said the framework must create meaningful opportunities for Namibian businesses while maintaining an environment that continues to attract international investment.
“The policy must address the concerns identified during the policy development process while ensuring that its requirements and institutional framework do not discourage investment,” Amutse said.
Head of the Upstream Petroleum Unit Kornelia Shilunga said the policy is intended to ensure Namibia retains more of the economic value generated by petroleum development instead of allowing opportunities to flow out of the country through imported goods, services and foreign expertise.
“The policy has been developed and has a specific focus to maximise the socioeconomic benefits, to ensure that Namibians actively participate across the value chain and that the development of the sector creates value for the country through enterprise development, skills transfer and industry growth,” Shilunga said.
She said consultations have been completed across all 14 regions and the contributions consolidated into the final document.
The National Planning Commission is expected to take over the next stage of the process, while implementation will require clearly defined responsibilities, timelines, coordination and reporting mechanisms to translate the local-content framework into opportunities for Namibian businesses.
