By: David Shoombe
The former Minister of Mines and Energy, Tom Alweendo, has cautioned Namibia’s financial system to adapt to the economic landscape to accommodate Namibian businesses in the oil and gas sector.
Speaking at the Bank of Namibia’s Oil and Gas Seminar, Alweendo indicated that the lack of transformation of the Namibian Financial Architecture, which was not built for the oil and gas industry, will keep many local businesses outside the oil and gas industry.
“If local banks and other financial institutions remain outside the oil and gas sector, the financial value chain will be captured elsewhere.
Advisory fees will be earned elsewhere. Project structuring will happen elsewhere. Local companies may win contracts on paper but fail to deliver because they cannot obtain working capital, equipment finance, guarantees, or insurance support,” Alweendo expressed.
Alweendo who also served as the governor of Bank of Namibia from 1997 to 2010 indicated that there is a need for Namibian industrial players to be ready for the oil and gas industry.
“We have never had this industry before, although the first discovery was made in the 1970s during exploration,” said Senior Economic Researcher at Monasa Advisory, Erastus Nakasole.
He also stated that most projects are being driven by well-capitalised companies, making it important to focus on strengthening the entire value chain.
“The industry is capital-intensive and requires significant funding. Access to finance will depend on the banking sector and government putting in place regulations that support lending,” he said.
Nakasole added that the oil and gas industry is characterised by relatively low operating costs but very high capital expenditure, requiring substantial upfront investment.
He also advised that the tax regime should strike a balance once projects begin, while financial policies and local content regulations must provide certainty for investors.
He stated that there is an absolute need to transform the financial system in order to allow local banks to avail capital for Namibian
business to operate in the oil and gas sector.
Namibia’s oil and gas discovery has attracted powerful and international players in the oil industry.
Based on the Foreign Direct Investment Intelligence report of 2025, Namibia was number 1 in Africa in greenfield investment, boosted by the oil discovery in Namibia’s offshore Orange Basin.
The Basin is where Total and Shell drilled multiple exploratory wells that hold 11 billion barrels of light oil and 2.2 trillion cubic feet of natural gas reserves, according to the US International Trade Administration.
Namibia’s FDI is expected to stay above USD 2 billion per year until 2030.
