Minister of Mines and Energy Tom Alwendo has raised concern over corruption in the emerging oil and gas industry, highlighting it would be a boulder in the effective implementation of the petroleum local content policy.
Namibia is one of the few African countries looking to make a push in the global oil market. The country’s National Upstream Petroleum Local Content Policy has come to the attention of industry stakeholders, following oil discoveries made in 2022 and 2023.
“As part of designing our LCP, there are three specific issues that I want us to be mindful of; these are the culture of entitlement, inclusivity, and transparency,” he said during the Stakeholders’ Workshop on the draft National Upstreat Petroleum Local Content Policy on Thursday.
He noted that among the practical challenges that will derail the effective implementation of local content policy is corruption in the oil and gas sector.
“In order to mitigate against corruption in the sector and ensure that in-country value creation reaches ordinary citizens requires us to be transparent in our operations,” he said.
He further noted that there is a need to prioritise designing a policy that promotes inclusivity.
“We must be fair and transparent with our employment procedures, procurement processes and in exercising oversight over the policy implementation. The more we are transparent in our operations, the higher the chance of realising the objectives of this LCP. If the culture of entitlement is allowed to thrive, it will be difficult to achieve the objectives of the LCP,” he said.
He emphasised that “excluding the majority of people from meaningfully benefitting from the oil and gas sector has resulted in huge social inequality that fuelled social discontent and unrest.”
The Minister encouraged entrepreneurs to spare no effort in understanding the new sector.
He reiterated the importance of “understanding the new sector which includes spending time reading up on what the sector requires; understanding the required capabilities to be an effective participant in the local content framework”.
“We need an LCP that will facilitate economic diversification, deepen backward and forward linkages from various segments of the oil and gas sector value chain, thereby fast-tracking our industrialisation,” he said.
According to the minister, the recent oil and gas discoveries in commercial quantities hold a great potential to transform the economy beyond taxes and royalties that would accrue to the State.
He said the importance of the government’s role through the Mines Ministry is to ensure an effective monitoring and evaluation system as “without an effective monitoring and evaluation system, we will not know if the Policy is delivering on its objectives. We will not know when we need to modify the Policy”.
“I have reason to believe that our institutions, our political system, and our legal frameworks are such that there is no reason why the oil discovery should not be a blessing” he added.
The draft policy highlights its objectives as the provision of a clear and stable regulatory framework for local content requirements and identification of specific sectors for the development of local capacity.
It also aims to maximise the employment and development of Namibians, similarly the participation of local suppliers along the petroleum value chain.
