Oversight needed to avoid oil resource curse – IPPR

The Institute for Public Policy Research says several governance issues need to be addressed to put Namibia in a good position to capitalise on an oil economy.

IPPR executive director Graham Hopwood said this at the opening of a panel discussion on oil, oversight and accountability organised by the Eco Dialogue Collective in Windhoek on Thursday.“This pre-production window is critical for building governance and oversight systems,” he said.

A final investment decision on the Venus project is expected from TotalEnergies later this year, which could be followed by an investment decision on the Mopane project in the next few years.Hopwood said an oil economy is characterised by both high expectations and high-value contracts, which increase the risk of corruption.

“Once revenues start flowing, bad practices become harder to reverse,” he said.He said Namibia’s free press and active civil society give the country several advantages compared to other countries that have discovered oil.But access to information, local content policies, and environmental governance remain key risk areas.

“The system is opaque at best,” Hopwood said. Petroleum exploration licence maps are out of date, and the Business and Intellectual Property Authority (Bipa) does not publish beneficial ownership information, which makes it difficult for Namibians to know which companies are involved in oil.

Hopwood further said the recruitment of an information commissioner was halted two weeks ago, with little information shared about the reason for this.Similarly, local content policies are a key area of risk, as large contracts could attract patronage and inflate costs, he said.

Hopwood explained that without transparency, local content requirements could allow politically-connected firms to access expensive contracts.He recommended that Namibia build on transparency, especially through the implementation of the Access to Information Act of 2022, to avoid the “resource curse”.Eco Dialogue is a collaboration between the IPPR, the Legal Assistance Centre, the Namibia Media Trust, and DW Akademie.

The panel discussed the new Petroleum Act – which will centralise power in the Office of the President – digital transparency, and the importance of community beneficiation.The panel also said oil and gas could transform the Namibian economy positively. Simonis Storm economist Almandro Jansen said it was important to also see the positives of investments and encourage oil majors to invest in Namibia.

“The costs these [oil] majors incur are very high. We need to make it attractive for them. Investment in Mozambique has been on hold for five years due to political instability,” he said.Other panellists said the revenues from oil must be used for the benefit of communities, and not just the political elite.“Natural resource development is a business with significant public impact,” IPPR research associate Frederico Links said.

Deputy chairperson of the Namibia Youth Energy Forum Mutindi Jacobs said it was important to ensure developments in the oil and energy sector benefit the youth.

“We must constantly ask: Will this be beneficial to us in 2050?” she said.She recommended digital transparency and building the capacity of Namibian young people. While the oil and gas sector would rely on foreign technical expertise, Jacobs said a shadowing system should allow qualified Namibian graduates to learn and qualify for those positions.All panellists agreed that addressing these governance challenges would enable positive transformation.

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