The National Planning Commission (NPC) has clarified that the recent remarks on borrowing against future oil and gas revenues were taken out of context. The commission says the government will only factor in oil income into its fiscal planning once projects reach a final investment decision (FID).
NPC director general Kaire Mbuende’s clarification follows criticism from the Independent Patriots for Change (IPC), which accused Mbuende of proposing that Namibia should borrow against future oil revenues despite uncertainty surrounding the sector.
Mbuende yesterday said government borrowing is guided by prudent fiscal management, debt sustainability and long-term development priorities, adding that borrowing decisions are based on projected performance across the broader economy rather than a single sector.
He explained that during a recent meeting in the Oshana region, he reflected on earlier government expectations that oil production would begin sooner, allowing increased investment in development and infrastructure.
However, slower progress in the sector has shifted those expectations, with significant revenues now likely to materialise only within the next five years.
“As a result, any revenue projections relating to the sector will only be considered once the relevant projects have reached a FID and the associated economic outcomes can be assessed with certainty,” Mbuende said.
He added that the government will continue closing the development financing gap through domestic resources, public-private partnerships, foreign direct investment and other sustainable financing mechanisms.
The clarification comes after IPC parliamentarian Rodney Cloete said Mbuende’s reported remarks contradicted Bank of Namibia governor Ebson Uanguta’s recent warning against borrowing “in the name of oil” before production begins.
Cloete said Namibia’s public debt already stands at 65.2% of gross domestic product, or N$174.6 billion, arguing that borrowing against future oil revenues before production starts would expose the country to greater fiscal risks.
The party also cites delays in Namibia’s oil industry, including Shell’s US$400 million write-down on its discoveries and the absence of a FID by TotalEnergies on the Venus project, saying government should wait until at least one major project reaches FID and petroleum revenue management legislation is in place before considering oil-backed borrowing.
“This is an open contradiction at the highest levels of the Namibian state,” Cloete said.
He argued that countries such as Angola, South Sudan and the Republic of Congo borrowed against expected oil income only to face rising debt burdens when expected revenues failed to materialise.
He called on the government to refrain from borrowing against future oil revenues until at least one major project reaches a final investment decision and parliament adopts petroleum revenue management legislation.
“Development is not delayed by the absence of oil-backed loans. Development is delayed by weak project selection, poor expenditure control, lack of transparency, and institutional incoherence,” Cloete said.
