Namibia is on the cusp of a historic transformation with recent offshore oil discoveries; the country has the potential to become one of Africa’s major energy producers. In previous articles, wearing my economist’s hat, I spoke of the need to avoid the ‘resource curse’ and the Dutch disease. Many column inches have been filled by other professionals, both nationally and internationally, wagging a finger and speaking of a potentially bleak outlook for Namibia, apart from a happy few well-connected individuals.

Other countries can serve as cautionary tales in the handling of their newfound oil riches. I don’t want to name specific countries, as naming and shaming serve no purpose. Namibia must embrace the challenge of harnessing oil revenues for sustainable development while avoiding the traps of mismanagement and overdependence.

Some countries that discovered oil assumed and anticipated immediate wealth for everyone. Large oil discoveries come with the investment of billions of US dollars from oil majors. Despite the Foreign Direct Investment (FDI) in extracting oil resources, a windfall for all did not materialize. Poverty remained widespread, with citizens feeling they received scant benefits from the petrodollars. There are many reasons for this. Analyzing these reasons and understanding how to avoid some of the pitfalls is how Namibia can turn the oil discoveries into a blessing for every Namibian.

Weak institutions and governance gaps, coupled with a lack of stringent regulatory and oversight frameworks, create an environment where opaque contracts and limited accountability become the norm. It is very positive to see that Namibia is being very conscientious in setting up its governance structures. The direct engagement that GRN has with oil companies and supplier companies to ensure that Namibia benefits from more than just tax revenue shows that Namibia is serious about guaranteeing that oil and revenue benefit every Namibian.

GRN seems to recognize that it has a once-in-a-lifetime opportunity to improve the socio-economic status of every Namibian, if the oil revenue is managed effectively. It will be essential to channel the revenue and the local opportunities into creating broad-based improvements in healthcare, education, or infrastructure.

Namibia has in fact established the Welwitschia Fund, a sovereign wealth fund modeled after successful examples, such as Norway and Botswana’s. It is particularly encouraging that the Welwitschia Fund has strict withdrawals limits and a strong mandate to invest for the country’s long-term future. general.

To avoid the Dutch disease risks that several countries suffered from because of the influx of oil money, it is essential to plan and project sensibly and for the long term. For Namibia, the lesson is that oil wealth alone does not guarantee prosperity. Oil revenues must translate into tangible improvements and jobs. Funds should be earmarked for healthcare, education, and rural development. By addressing inequality and poverty directly, GRN can ensure that oil wealth benefits all citizens, not just elites or foreign investors.

We must not be overly reliant on oil revenues; we need to divest from oil as the revenue starts flowing. The oil revenues must catalyze, creating an environment that promotes the growth of these other sectors. If global oil prices fall, we must be resilient enough as an economy to weather potential price shocks.

Regrettably, we must address corruption and mismanagement. There are numerous examples of countries worldwide where billions in oil revenues were siphoned off through patronage networks and poorly managed state enterprises. Our President, the Hon. Netumbo Ndaitwah, has vowed to stamp out corruption and any chance of this happening in Namibia. This is great, and if we get this right, our country’s oil resources will truly become a blessing.

Namibia recognize that oil can be both a blessing and a curse. We must embrace the principles of Harambee and pull together to ensure that oil will be a blessing for every Namibian.

 Namibia’s oil discoveries present a once-in-a-generation opportunity. By building strong institutions, managing revenues transparently, diversifying the economy, and investing in its people, Namibia can chart its own course, continually building on and borrowing from best practices and case studies. Oil should not define Namibia; it should be its blessing and finance its future.

By JOSEF KEFAS SHEEHAMA

President Netumbo Nandi-Ndaitwah advocates a shift away from exporting raw materials and toward domestic producing and processing goods to accelerate economic growth, create jobs, and add value.

The president addresses a high-level roundtable hosted by the Business Council for International Understanding (BCIU) in New York.

For Namibians to witness a full transformation of the country’s economy from a reliance on raw materials to more diversified, innovation-driven growth pathways, the president should demand a serious commitment from all of the cabinets and ministers to engage at the grassroots level to find some ideas that will be deemed a collective national effort, laying the foundation for sustainable development and increased global competitiveness.

This transition encourages innovation, builds local capability, and creates more lucrative opportunities for employment, all of which contributes to a stronger and more resilient national economy.

As a result, I applaud the president for reaffirming this bold decision, which was also supported by the previous administration, and for disclosing that the government is working to implement policies to control raw mineral exports and encourage potential investors to consider value addition as a means of increasing national revenue and creating jobs for Namibians.

Exporting raw materials can increase a country’s reliance on foreign markets, deplete natural resources, and hinder domestic industrialization and value-added industries.

This action is crucial because it aligns with NDP6’s strategy, which focuses on diversification, the extraction of natural resources, and the empowerment of young people to transform Namibia from an exporter of raw materials into an industrial producer of finished goods with added value.

If we want to achieve economic emancipation, we should cease exporting resources in their raw form and focus on adding value to them. Otherwise, Namibia will continue to be impoverished and unequal. If not, most of the value and all of the good employment will move to the countries in the northern hemisphere.

I am incredibly hopeful about our country’s future and, consequently, the impact it will have on the rest of the world. Furthermore, when we implement this policy and legislation, we are essentially declaring that we do not want raw materials exported from Namibia.

So, if we can process the raw materials, we will have local value, maintain jobs, and create wealth for our people, which is exactly what this reform policy should advocate for.

As a result, the intention is to attract more investors in the downstream business. This indicates that policy reform will encourage international investors to establish processing facilities in Namibia. This will contribute to economic diversification and a stable Gross Domestic Product (GDP).

Furthermore, Namibia’s mining sector remains an important engine of long-term economic development. Indeed, this industry contributes significantly to exports and has critical interconnections with other sectors of the economy. We should admit that our mining industry is undeveloped, resulting in the export of raw minerals.

Namibia’s mining sector is crucial for mineral exploration, extraction, processing, and marketing because the country lacks enough capital on hand and technological means to fund large-scale capital-intensive projects.

Moreover, I am convinced that this measure will help the country’s economy by expanding its processing industries. Some contend that the method will lower the amount of commerce in specific minerals.

Several African states are concerned that a government that has outlawed the export of such minerals may not allow the materials to be supplied to another country, thereby impeding trade with partners.

We argued this question with 50 African countries who attended the China’s modernization and African development conference in order to gain a general understanding of other African countries’ perspectives.

That being said, if an effective policy is enacted, we can be confident that it will eventually operate. We have to comprehend that Africa contributes most of the raw materials used, such as in the development of green technology.

If the continent decides to establish the rate for such material imports and exports, it will become an unstoppable force. We cannot keep exporting unprocessed goods. Potential investors should create jobs and impart skills to Namibians. As a result, while policymaking is adequate, implementation remains a challenge.

If policy reform inhibits the export of raw minerals, I believe additional actions should be done to ensure that Namibians get the most out of their resources. This approach is viewed as an effort to promote the expansion of value chains. Exporting raw materials results in income loss.

Statistics demonstrate that raw material exports are sold at a low price, but finished products are imported at three times the price. Namibia’s Minerals Policy should be streamlined to let investors generate value.

This will encourage foreign investors to adopt value addition, transforming all traders into producers and thereby boosting domestic economic activity.

As a result, being exporters of raw materials rather than finished goods with higher added value limits our people opportunities for employment.

As Namibia prepares to move away from raw material exports, we must devise a clear strategy for achieving long-term economic development, reducing environmental degradation, and boosting real prosperity through the promotion of value-added commodities and services.

Prior to industrialization, international companies sought lower labor costs, access to raw resources, and expansion into new markets, driven by government incentives and the need to reduce operational costs.

To gain mutual benefits from cooperation, win-win strategies and expectations must be defined from the outset. This allows both parties to coordinate their efforts and work together toward a common goal.

The country can gain a competitive advantage and expand its economic reach by transferring technology and partnering with multinational corporations.

This roadmap should include a diagnostic process for establishing competitiveness targets strategic priorities, improving the business environment, attracting investment, simplifying regulations, and securing favorable trade agreements to ensure a smooth and beneficial transition from commodity dependence to diversified and higher-value exports.

To this end, an outlaw on raw material exports would encourage the development of processing facilities in Namibia, giving Namibians a larger portion of the value chain. As a result, a partnership focused on vital minerals would transform this into a mutually advantageous strategic economic alliance.

Therefore, it’s not going to be easy; Namibia must be active in international trade negotiations to ensure that its value-added products have secure and advantageous access to important markets. This transition will be viable and profitable with the help of trade agreements, export incentives, and partnerships across borders.