Namibia : Harnessing Hope - How Namibia Can Avoid the Traps of Oil Dependency

Namibia s burgeoning oil and gas sector, with significant foreign investments from companies like Total Energies, Shell, and Galp, has sparked optimism for economic growth. However, this development raises concerns about the Dutch disease, where a booming natural resource sector overshadows other vital industries such as agriculture and tourism. Between 2021 and 2023, Namibia attracted N$73 billion in foreign direct investment, with 45% concentrated in oil and gas. While this may boost the economy in the short term, it risks neglecting traditional sectors crucial for sustainable development. Agriculture, supporting 70% of Namibia s population and contributing 5.1% to GDP, and tourism, employing over 100,000 individuals and contributing 3.5% to GDP in 2018, could suffer from this imbalance. The minister of agriculture, water, and land reform, Calle Schlettwein, warned against the overemphasis on oil and gas, noting that environmental concerns are often overlooked. He highlighted the industrial development of green hydrogen in one of Namibia s national parks, funded by the Environmental Investment Fund. The Africa Rising narrative, exemplified by Mozambique s natural gas discoveries, has led to optimism about economic growth and development. However, Mozambique s experience shows that this optimism can be dashed by declining commodity prices and ongoing conflict. Zimbabwe s Marange diamond discovery also failed to deliver on its promises due to corruption. To avoid similar pitfalls, Namibia must focus on investing in its traditional sectors, ensuring a balanced and sustainable approach to development. This will help build a resilient and inclusive economy, avoiding the risks associated with overreliance on a single sector.

Source: allafrica.com
Published on 2024-09-30

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