Bank of Namibia Governor Johnaness !Gawaxab says that Green Hydrogen could contribute up to N$75 billion to the country’s gross domestic product (GDP) over the next seven years.
Speaking during Bloomberg’s ‘Namibia in Focus’ event on Tuesday, !Gawaxab was optimistic about Namibia’s economic prospects, particularly green hydrogen and the light oil discoveries.
“By 2030, it could contribute $4.1 billion to gross domestic product, which is 32% more than 2030 GDP estimates without a hydrogen industry,” !Gawaxab said.
Several countries recently signed agreements with Namibia with regard to green hydrogen, including the European Union, Germany, Finland and The Netherlands, and Japan.
The largest project at hand is the $10 billion (N$187 billion) with German company Hyphen Energy, which President Hage Geingob signed in May this year.
The EU has set a goal of importing 10 million metric tonnes of green hydrogen to help decarbonise the continent’s industries by 2030., which is equivalent to the annual amount of “gray” — or high-emissions — hydrogen made in the U.S. currently with natural gas.
“Namibia aspires to produce hydrogen and its derivatives at highly competitive costs and create an at-scale green fuels industry that will serve markets in Europe, China, Japan, South Korea and other parts of the world,” the Governor said, adding that the industry also stands to create an estimated 18,000 jobs.
!Gawaxab also stated that Namibia is doing well despite the obstacles provided by the country’s dropping rate of gross fixed capital formation and a limited skill base.
Namibia, with its enormous natural resources, strong institutions, and persistent political stability, stands out as a symbol of stability and growth, !Gawaxab indicated.
He also highlighted aspects defining Namibia’s economic future, providing insights into the country’s strengths and opportunities for progress.
“Namibia stacks up well despite the challenges posed by the country’s declining rate of gross fixed capital formation (GFCF)and the limited skills base,” said !Gawaxab.
GFCF, also called “investment”, is the acquisition of produced assets (including purchases of second-hand assets), including the production of such assets by producers for their own use, minus disposals
!Gawaxab underlined that, while these obstacles are formidable, they are not insurmountable.
As a result, he stated that in order to navigate the way out of these difficulties, Namibia must first mobilise domestic resources, develop budgetary buffers, and participate in structural changes.
!Gawaxab addressed the spike in global inflation and its ramifications, emphasising the necessity for central banks to tread carefully in this unpredictable situation.
He emphasised that Namibia’s inflation has fallen since its peak, offering some stability in the country’s economic environment.
During the announcement of the interest rate rise in August, the Bank of Namibia stated that inflation in 2023 was now expected to average 5.6%, down 0.4 percentage point from the prediction given in June.
!Gawaxab praised Namibia’s inclusive institutions for promoting political plurality, protecting property rights, and fostering economic opportunity.
He also outlined the function of the BoN in safeguarding monetary and financial stability.
Namibia’s Monetary Policy Framework, according to !Gawaxab, has repeatedly demonstrated its effectiveness.
“The benefits of the one-to-one peg arrangement to the South African rand outweigh any perceived disadvantages. This arrangement provides a stable anchor for our economy, shielding us from external volatility while fostering a conducive environment for sustainable growth,” he said.