Namibia’s oil find: Blessing or curse?

Mines minister Tom Alweendo says the way in which the Namibian government plans to handle the revenue from recently discovered oil deposits will determine whether the discovery is a curse or blessing to Namibia.

While he remains cautious, the mines minister has confidence in the country’s institutions and systems, which in his view play a huge role in how oil discoveries affect African countries.

“What we decide to do with the revenue will determine if our oil discovery will be a curse and this will depend on whether we have good systems or institutions in place. When revenue do not actually go the people and goes into the pockets of some, or the money gets stolen, then it will be a curse. But with our institutions I don’t see why it could be a curse, but perhaps these institutions have not been tested enough,” said Alweendo.

Speaking during an oil and gas indaba on Wednesday, Alweendo also pointed out that it is important for countries like Namibia to figure out what truly attracts investors, but certain things ought to be in place which include an open and transparent environment and do away with red tape to be able to attract investors.

“I am not saying make it easy for them, but make your decision quicker. One of the things people are concerned about is the environment and there are people concerned about the affair of Recon Africa, but it does not mean don’t allow them to invest. We do have environmental laws and make sure investors operates within these frameworks. So, everybody must know that if they are going to do this, they have to do a, b, c,” he said.

Youth are asking questions

Alweendo also highlighted that the investors too should realise their responsibility when they operate in host countries pointing out that people on the continent are asking whether mining companies are working in the interest of the people.

“Then there is also the responsibility of the investor, especially when you are from outside Africa. The youth are becoming restless and they say you are taking out more than what you have left behind. We must ensure that there are real partnerships,” he said.

Different animal

Gabriel Mbaga Obiang Lima, minister of mines of Equatorial Guinea, remarking on Namibia’s 10% stake in the oil discovered off the coast of Namibia, while investors hold 90%, said it is important to explain to the citizens that oil and gas industry works differently than the ordinary mining sector.

The Namibian government has come under fire for only having a 10% stake, with many critics saying the government is selling itself short.

“There are contracts between governments and these companies but when it comes to exploration it is a very risky business. Government need to avoid investing where there are risks, these companies are bringing billions of dollars and they have different portfolios which allows them to take risks. They sooner they recover their debt the sooner they pay taxes. And government can get its money from these revenues,” he said.

He added that governments should give limitations on the periods expatriates stays in a country to no more than 3 years otherwise they will not transfer their skills and technology to local skills.

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