President Hage Geingob has revealed that equity injections in exploration activities related to the offshore oil discoveries boosted the country’s Foreign Direct Investment, with N$13.2 billion, translating into a 7.2% of Gross Domestic Product (GDP) during the first nine months of 2022.
“This was the highest year-on-year growth witnessed since 2015. These financial inflows are running at a record high, with FDI being the main contributor, and these green shoots are undeniable,” Geingob said during the State-of-the-Nation Address (SONA).
Geingob expected FDI inflows to remain elevated in 2023 on the backdrop of oil discovery appraisals currently being undertaken, coupled with the commencement of the green hydrogen project feasibility study.
The study is to be undertaken to a tune of N$2.5 billion.
“This demonstrates growing investor confidence in Namibia,” he said.
This comes after Geingob was bullish in January about the future economic prospects of the country following the discovery of oil by Qatar Energy, Shell, and Total Energies in the Orange Basin, offshore Namibia near Luderitz.
Geingob stated that the Shell and Total Energies discoveries could generate annual taxes and royalties of between N$60-N$95 billion, with the potential to create 3,600 jobs at the peak of production.
According to international experts (Wood Mackenzie), Namibia stands to receive N$500 billion in FDI in this regard.
PSG Wealth Management Namibia forecasted that Namibia will generate over N$12 billion in Foreign Direct Investment in 2022 due to increased investor confidence and opportunities in the oil and green hydrogen industries.
Research conducted by investment advisory firm Cirrus Capital revealed that the country has the potential to generate over N$500 billion in revenue in the coming decade through taxes and royalties from the oil sector, with the Ministry of Mines and Energy forecasting the government to collect 55% of all revenues to be generated from oil through taxes.
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