The oil and gas industry has brought Namibia N$74.4 billion in foreign direct investment (FDI) since 2021.
Speaking at the Bank of Namibia annual symposium yesterday, research director Emma Haiyambo said the discovery of oil in offshore Namibia has brought significant foreign capital to the country.
“The oil and gas industry attracted about N$74.4 billion in FDI between 2021 and 2025, accounting for roughly 56% of total inflows,” she said.
The industry has also contributed to 30% of gross fixed capital formation, which is a measure of the new value added to the economy through fixed infrastructure or machinery.
“However, the contribution of the oil and gas industry to gross domestic product (GDP) has been low. That is because not all the investment from oil exploration is spent in the country,” she said.
Since the discovery of oil, there has been an increase in imports related to the industry. Most of those imports are services, Haiyambo said.
The industry accounts for over a third of all imports in services to the country, but only 1% of goods imported.
“This is a reflection of the constraints in the domestic economy – in terms of capacity – to meet the demands of this industry,” she said.
“As we move forward, the import of goods should pick up as operators prepare for production,” she said.
Bank of Namibia governor Ebson Uanguta yesterday said the country needs to prepare to use oil and gas to grow the entire economy.
“How do we ensure oil and gas strengthens a diversified and resilient economy rather than deepening our dependence on another primary commodity?” he asked.
In addition to effects on local participation, jobs, and the environment, the oil and gas industry will also bring new financial considerations, Uanguta said.
“[The bank] anticipates effects on the economy and on our financial system. Large financial flows and exports could have significant effects on inflation, which is our core mandate,” he said.
The financial sector will also be exposed to larger capital projects, which brings its own risks, the governor said.
“Are our policies, institutions, regulatory frameworks, human capital and economic structures ready for the transition from exploration to production?” he asked.
