Reflection on Local Content Policies: A Catalyst for Namibia’s Economic Development and Growth

The namibia chamber of Commerce and Industry and Antila Consultancy hosted a local content oil and gas conference at Lüderitz from 16 to 18 April, under the theme: ‘Empowering Namibia’s Energy Ambitions by Connecting Industry and Indigenous Talent’.

Article 100 of Namibia’s Constitution states: “Land, water and natural resources below and above the surface of the land and in the continental shelf and within the territorial waters and the exclusive economic zone of Namibia shall belong to the state if they are not otherwise lawfully owned.”

It was an honour for me to attend the conference involving the local and global community. I believe Namibia is among the most resource-rich nations but our educational system needs to be reevaluated. Not only for basic education but also to improve Namibia’s technical colleges.

The right-sizing of local content policies can encourage financial investment and technological transfers that will benefit Namibia in competing to attract the best international community, as well as investors searching for the most attractive markets to maximise efficiencies and manage costs.

Namibia’s political stability contributes to increased investor confidence. This is especially important as governments look for ways to boost economic development and elevate local capacity. In response, the majority of resource-rich nations have adopted resource-nationalist legal frameworks to improve strategic local ownership and local economic maximisation, as well as to encourage the spread of development to local economies.

Furthermore, in most resource-rich nations, local content policies have been implemented in response to the need to boost local participation in the extractive industry. By allowing local businesses to access multiple value chains and obtain more significant economic benefit, local content policies seek to regulate the extractive industry and give the state and local businesses more ownership.

Increasing local involvement in employment, training, domestic benefits and contracting to supply goods and services to the sector are crucial steps towards optimising local take. Therefore, local content development is expected to become even more crucial for all industry stakeholders as the necessity of localising value chains in Namibia grows.

The development of capable and persistent Namibian businesses that can raise money and collaborate with the right partners, both locally and globally, to create profitable ventures, will ultimately determine its success.

The purpose of the policy is to make it possible for local companies, workers and inputs to take part in the extractive industry. It is true that legal content demands that nations have a highly skilled labour force, robust institutions and a thriving industrial base that is readily connected to the relevant sector.

In order to accommodate investors and benefit the local community, as well as achieve economic emancipation, the nation must effectively manage local content. Legislators must enact measures that are welcoming to investors.

The fact that Namibia is in competition with other nations means that local content policies ought to benefit the local and global economies. In order to prevent political instability, Namibia should discourage corruption, selfishness and fanaticism.

Furthermore, since implementing stricter monitoring procedures or enacting policies for the oil and gas industry will impede development and growth, these measures should be realistically and economically justified. It is, therefore, necessary to have controls, but we also need to consider the extent to which those controls are obstacles and devise strategies to minimise their impact.

The tight exchange control regulations in Namibia may make it difficult for the oil and gas sector to expand, so the Bank of Namibia must take this into account. Anti-money laundering is a necessary response to financial crimes, but Namibia must be careful not to lose foreign direct investment due to an overly strict exchange control policy.

Moreover, disagreement and resource curses have no place in our society. The nation’s fastest-growing economic sector is natural resources, which serve as the foundation of the economy. The conventional view is that resource revenues should create wealth and advance economic growth. Adopting economic policies that support economic expansion is a sign of sound economic policy. Adopting political tactics that serve the interests of politicians over those of the people is referred to as bad politics.

Although it’s still early, Namibia should begin preparing to join the Organisation of the Petroleum Exporting Countries in order to gain access to energy-related technology, resources and expertise.

This will improve Namibia’s capacity to meet domestic energy needs and reduce dependency on outside sources. Although we know there is still a long way to go, as a nation we must aim high and join the ranks of major oil producers.

To this end, the main goal for policy development is the creation of local content policies and regulations. This is part of a plan to boost oil and gas benefits in order to encourage economic transformation. Thus, the necessity of strategic alliances between domestic and international businesses is advised.

*Josef Kefas Sheehama has over 22 years of experience in banking. He holds Bcom Banking, B Com Law. LLB degree, an MBA, a postgraduate Islamic finance and banking degree, CAIB (SA), AIB (SA), CHBP (SA) and PhD (graduation reserve). He has authored more than 200 business and economics articles and has served on the green hydrogen panel at Northwest University.