Namibia’s oil and gas industry attracted about N$74.4 billion in foreign direct investment between 2021 and 2025, accounting for roughly 56% of the country’s total FDI inflows, but the Bank of Namibia says significant legal, institutional, skills and public-information gaps remain before first oil.
The figures form part of a first-oil readiness assessment presented by Bank of Namibia director of research and financial sector development Dr Emma Haiyambo at the central bank’s 27th Annual Symposium on Thursday. BoN confirms Haiyambo delivered the presentation titled Namibia’s Readiness for First Oil: Assessing Institutional, Regulatory and Economic Preparedness for Sustainable Resource Development.
The assessment shows that offshore exploration has already become a major source of investment and capital spending despite Namibia having yet to produce commercial oil.
Oil and gas exploration accounted for an average of 30% of total Gross Fixed Capital Formation (GFCF) between 2022 and 2025, according to the presentation.
The scale of investment, however, has also generated a great demand for imported services and goods, highlighting the challenge Namibia faces in retaining more petroleum expenditure in the domestic economy.
N$68bn spent on foreign goods and services
Oil and gas accounted for about N$60.3 billion in services imports since 2021, representing 36% of Namibia’s total services imports over that period.
Another N$7.7 billion was spent on goods imported for oil and gas exploration and appraisal, equivalent to about 1.4% of total goods imports.
Combined, the figures indicate approximately N$68 billion in oil and gas-related imports of goods and services since 2021.
The figures matter to Namibia’s local-content debate because they show the size of expenditure currently flowing to foreign providers while the country works to develop domestic businesses capable of supplying the petroleum industry.
The Bank identifies potential opportunities for Namibian companies in customs clearance, warehousing and storage, freight and logistics management, waste management, oilfield support and logistics and supply-base services.
Further opportunities include marketing, consulting, business support, risk and relationship management, and downstream fuel distribution, storage, retail, logistics and procurement.
N$552.8bn domestic savings pool
The assessment also highlights the size of Namibia’s domestic financial resources.
Assets held by non-bank financial institutions reached N$552.8 billion in 2025, increasing 16.6% from the previous year.
BoN’s 2026 Financial Stability Report independently confirms that figure, recording aggregate NBFI assets of N$552.755 billion in 2025, compared with N$474.084 billion in 2024.
The presentation sketches a possible progression from domestic savings through risk-sharing mechanisms and supplier finance to stronger local firms and eventually higher-value local content.
However, it cautions against treating petroleum-related investments as inherently safe merely because of their strategic importance.
“National importance should not be confused with low risk,” the presentation states.
Despite the investment already entering the country, BoN’s assessment identifies several areas where Namibia’s preparations remain incomplete.
It says key legal instruments are still under development, important institutional structures are transitioning, institutional mandates lack sufficient clarity, and the new industry presents institutional and capacity challenges.
On local content, the assessment says the policy is fully developed and currently focused on the upstream segment, but identifies “limited enforceability of local content provisions”, shortcomings between local-content targets and available domestic skills, and local skills and capability gaps relative to international industry requirements.
It recommends advancing work on Local Content legislation to ensure enforcement, harmonising local-content requirements with domestic capacity and establishing a petroleum business development and support centre.
Petroleum laws still being prepared
The assessment lists Namibia’s existing petroleum legal framework, including the Petroleum (Exploration and Production) Act of 1991, the Petroleum Taxation Act of 1991, and the Petroleum Laws Amendment Act of 1998.
It also identifies the Petroleum (Exploration and Production) Amendment Bill, 2025, as another legal instrument relevant to the country’s preparations.
BoN recommends advancing the gazetting of key legal instruments and using the amendment legislation to clarify institutional mandates.
The assessment says Namibia’s upstream fiscal regime includes 35% petroleum income tax, royalties, Additional Profits Tax and potential dividends from Namcor.
One point in the presentation needs qualification. Its fiscal-regime slide refers to “15 per cent Additional Profits Tax”, but Namibia’s Petroleum (Taxation) Act provides a multi-tier APT mechanism rather than a simple flat 15% tax. External tax summaries describe thresholds at 15%, 20%, and 25% rates of return, while the Act and licence terms govern the exact tax calculation. The legislation confirms the 35% petroleum income-tax rate.
The assessment identifies the specialist capabilities Namibia needs as petroleum projects advance toward final investment decisions.
These include petroleum economics and fiscal modelling, petroleum accounting and cost auditing, petroleum taxation, reservoir engineering and petroleum geoscience, specialised petroleum law, offshore health, safety and environmental regulation, sovereign asset and liability management and public communication.
BoN says local training institutions should incorporate these capabilities into their curricula as demand from petroleum investment grows.
The presentation’s timeline identifies the creation of an Upstream Petroleum Unit in 2025 and a targeted Venus FID in 2026, subject to approvals. It says Venus operator TotalEnergies and its partners reaffirmed their commitment, while Galp and its partners expanded the multi-well appraisal campaign at Mopane.
Importantly, the assessment does not treat discovery as equivalent to guaranteed production.
BoN warns against betting on oil too early
Timing is one of four major risks BoN identifies for a first-time oil producer, alongside fiscal risks, Dutch disease and environmental impacts.
“Production can be delayed; avoid commitments built on fixed dates,” the presentation cautions, adding: “Discovery ≠ guaranteed production.”
The fiscal warning is equally significant. The assessment says commodity upswings can encourage pro-cyclical spending and borrowing and that prospective producers often overestimate future petroleum revenues.
It cites an average overestimate of 37% and places Namibia’s public debt at 64% of GDP. BoN presents those figures as part of the risk assessment rather than as a forecast of Namibia’s future oil revenues.
The Dutch disease risk identified by the Bank concerns resources shifting from other sectors to the petroleum industry, potentially weakening their competitiveness and adding inflationary pressures.
Environmental risk is the fourth concern, with the Bank warning that offshore oil spills could have severe consequences and therefore require adequate safeguards.
Another weakness identified by the assessment is the way expectations around oil are being managed.
BoN says Namibia currently has “No Public communication strategy”, alongside limited public understanding of petroleum project timelines and a need for greater public awareness.
The Bank recommends developing a public communication strategy and introducing public engagements to promote informed expectations about the emerging industry.
This becomes particularly important because the presentation repeatedly distinguishes discoveries and appraisal activity from an assured transition into commercial production.
Welwitschia Fund needs strengthening
The assessment also recommends strengthening the Welwitschia Fund, Namibia’s sovereign wealth fund, to support future management of petroleum revenue.
Its recommendations fall into four areas: legal and regulatory frameworks, local content, capacity and skills retention, and public expectations.
Beyond completing legislation and strengthening local-content enforcement, BoN recommends implementing a strategic public-sector capacity-building plan and introducing special remuneration and retention frameworks for scarce petroleum skills.
The conclusion is therefore more nuanced than saying Namibia is either ready or unready for first oil.
The assessment says the country has already undertaken significant groundwork and, as one of the few countries to have established a sovereign wealth fund before the onset of oil production, is “comparatively well-positioned to manage future revenues from the oil and gas sector towards sustainable and inclusive resource development.”
But it immediately qualifies that finding, warning that “efficient positioning of key institutions that will govern the production is crucial, before FID, to avoid legal and regulatory changes that may carry costs to the country.”
