Oil, gas to add N$11.5bn annually to Namibia’s GDP

Namibia's gross domestic product (GDP) is forecast to grow by 5.8% annually, primarily driven by the oil and gas sector, a survey by Deloitte Namibia shows. According to the Oil and Gas Industrial Baseline Survey (IBS) conducted by Deloitte Namibia, the oil and gas sector will contribute an average of US$648 million (N$11.5 billion) to the GDP each year during the production phase. During the construction phase, Namibia’s GDP is expected to grow by +1%, with an estimated GDP average impact of US$113 million (N$2 billion) contributed by oil and gas every year. The primary drivers would be an increase in gross operating surplus and additional income for skilled labour,” the survey stated. Meanwhile, as the project transitions into the production phase, projected to last 20-25 years, the economic impact is expected to be even more substantial. TotalEnergies and Shell commissioned the survey to identify potential local content opportunities within Nigeria's oil and gas sector. The findings indicate that in a scenario involving one floating production storage and offloading unit, the construction phase is expected to create 5,000 jobs, contributing to a 1% GDP growth during this period. "The construction phase, anticipated to last 6-8 years, is expected to generate approximately 5,000 jobs, including 500 direct jobs, 2,000 indirect jobs, and 2,500 induced jobs," said the report. Key sectors expected to benefit include the transport industry, with 953 jobs, the wholesale and retail trade sector with 598 jobs, and private household services with 595 jobs. "Approximately 7,000 jobs are anticipated to be created, with private household services, wholesale and retail trade, and transport industries being the primary drivers. The GDP is expected to grow by 5.8% annually, with the oil and gas sector contributing an estimated US$648 million each year," said Deloitte. Primary drivers include gross operating surplus, additional income for skilled labour, and a significant impact from government take from oil production, the survey noted. The survey gathered insights from 254 suppliers, the majority being medium-sized, majority-owned Namibian companies. The data showed a strong interest in the oil and gas sector among local suppliers but also identified challenges such as payment timelines, administrative approvals, and a shortage of skilled labour. The report emphasised the need for local suppliers to upskill to participate effectively in the oil and gas sector. “Local suppliers will require upskilling to be part of the oil and gas sector. While 82% of respondents currently have some elements of health, safety, security, and environment (HSSE) in place, only 14% do annual reporting, and 29% monitor HSSE processes,” the report highlights. Deloitte said the projections are based on hypothetical scenarios, as the final investment decision for the oil and gas project is still pending, thus all figures should be considered as directional estimates rather than concrete forecasts. Deloitte Country Leader in Namibia Melanie Harrison announced the survey findings at the Namibia Oil and Gas conference.

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