Chamwe Kaira
The International Monetary Fund has called for an improvement in specialised statistical capacity that will ensure consistent and proper recording of oil and gas exploration and tracking its impact on the economy.
The oil discovery is expected to create around 4200 jobs after the discovery in the past two years of two significant light crude oil discoveries in the Orange Basin, namely Venus and Graff. The Venus discovery alone ranks as the second-largest deep-water oil discovery in the world since 2015. A third oil find was declared in early March, as a result of Shell and QatarEnergy’s successful drilling of the Jonker-1X exploration project.
“New mineral discoveries and the investment in green energy provide an opportunity to boost growth, employment, and foster diversification. Strengthening the public-private partnership framework and addressing constraints hampering entrepreneurship, including the regulatory burden, skill mismatches, input costs, especially energy and water, and governance challenges would help the Namibian economy benefit from the investments in these emerging sectors,” the IMF said.
The oil industry is expected to earn Namibia N$105.9 billion per year in revenue to state coffers.
The IMF stated that new projects in green hydrogen, oil and gas exploration, and processing of critical minerals can help diversify the economy if accompanied by reforms to address skill mismatches and reduce the cost of doing business.
It has been estimated that Namibia has the potential to generate significant economic value through the production and export of green hydrogen estimated at N$653 billion.
The IMF has projected that Namibia’s real GDP will grow by 4.6 percent in 2022. Growth of 3.2 percent in 2023 is expected to bring output back above the pre-pandemic level.
The IMF said on the back of sustained mining growth and recovery in tourism, real GDP growth reached 4.6 percent in 2022 and economic activity is expected to surpass the pre-pandemic level in 2023 with a growth of 3.2 percent. Nevertheless, unemployment remains elevated at 21 percent, and is particularly acute among the youth. For 2024 and the medium-term, growth path is expected to stabilize at just below 3 percent.
