Staff Writer
The Governor of the Bank of Namibia, Ebson Uanguta, has called on the country’s financial sector to strengthen its technical expertise, governance and risk management capabilities to participate sustainably in Namibia’s emerging oil and gas industry.
Speaking at the Bank of Namibia’s Oil and Gas Seminar in Windhoek, Uanguta said participation in the sector must be supported by capability, as financing opportunities will extend beyond oil production into transport, logistics, engineering, accommodation, technology, infrastructure, equipment supply and professional services.
He said oil and gas projects are characterised by substantial capital requirements, long investment horizons, complex contractual arrangements, foreign currency exposures and specialised technical risks.
“As a result, banking institutions will require appropriate expertise, governance and risk-management frameworks,” Uanguta said, adding that participation in the sector must remain consistent with institutional soundness and financial stability.
Uanguta said Namibia’s preparedness should not be limited to the banking industry, noting that the country’s large non-bank financial sector, including pension funds, insurers and investment managers, could play a significant role in financing commercially viable infrastructure and productive investments linked to the broader energy economy.
However, he cautioned that investment decisions by these institutions must continue to be guided by fiduciary responsibilities, due diligence, diversification, sound governance and appropriate risk-adjusted returns.
The governor also called for the deepening of Namibia’s capital markets through the development of bonds, infrastructure financing instruments, private capital structures, guarantees and blended finance solutions to diversify funding sources and reduce reliance on commercial bank lending.
On local participation, Uanguta said success should not be measured solely by ownership levels or the number of contracts awarded to Namibian companies.
Instead, he said meaningful participation should be reflected in the development of sustainable local enterprises, specialised skills, sound financial management, strong corporate governance and competitive domestic supply chains.
He added that financial institutions could contribute by offering appropriate financial products, advisory services and support aimed at improving the bankability of local businesses.
At the same time, Uanguta stressed that projects of national importance should not bypass prudent lending standards.
Uanguta said regulation would also need to evolve alongside the country’s changing economic landscape as new industries introduce new financing structures and risk profiles.
He said an enabling regulatory environment should not be interpreted as a relaxation of prudential standards, emphasising that strong governance and risk management would become even more important given the complexity and uncertainty associated with oil and gas activities.
The central bank, he said, would continue to focus on safeguarding financial system stability while supporting responsible innovation and sustainable economic development.
According to Uanguta, regulators will need to monitor concentration risks, foreign currency and liquidity exposures, large credit concentrations, cross-border financing, operational risks, environmental and climate-related financial risks, as well as the broader macro-financial effects on domestic liquidity, credit growth, asset prices and foreign exchange demand.
He also highlighted the importance of coordination among government ministries, regulators, financial institutions, energy companies, investors, educational institutions and professional service providers, noting that no single institution possesses all the expertise required to manage the emerging industry.
Uanguta said the Bank of Namibia would use insights from the seminar to strengthen its engagement with supervised institutions, government and industry stakeholders, while assessing whether additional supervisory guidance, capacity development and regulatory coordination would be required.
He also expressed appreciation to the Bank of Uganda for sharing its experience in preparing Uganda’s banking sector to participate in the oil and gas value chain, saying Namibia could benefit from lessons learned by fellow African central banks as it develops its own regulatory framework.
