The Namibian oil and gas industry is abuzz with hopeful entrepreneurs salivating at the prospect of a quick buck. A critical theme emerges in light of this: increasing local entrepreneurial integration into the oil and gas value chain without compromising on service quality assurance.
The pursuit of both individual and collective economic value is a normal goal. After all, economic growth paves the way for progress, development, and improved standards of living. However, as the course is charted for Namibia’s oil and gas industry, it’s imperative that the quest for financial gain is balanced by an unwavering commitment to nurturing an industry that safeguards the interests of future generations.
The central challenge is de-institutionalising the culture of scrappy, informal tenderpreneurship in the face of highly rigorous, international oil and gas service provision standards. Tenderpreneurship, a business practice that often relies on the vulnerabilities of faulty public procurement mechanisms, is increasingly employed in Namibia by well-connected business strategists that may or may not have the capacity to deliver services.
Under close scrutiny, the Namibian oil and gas industry reflects the tension between the practices of tenderpreneurship and the stringent international standards that underpin the sector. The dichotomy between the substandard mechanics of tenderpreneurship and the uncompromising international standards of the industry becomes pronounced when evaluating factors like environmental impact assessments and reservoir management.
The consequences of unchecked tenderpreneurship are far-reaching. Instances like the Swakopmund low-cost housing project underscore the detrimental impact of prioritising profit over delivery. Now more than ever, a sustainable oil and gas industry for Namibia requires that tenders are awarded to entities with a track record of experience, dedication to project delivery, and a commitment to overarching economic and social benefits.
The array of services required for the oil and gas industry is expansive–ranging from mechanical engineering and vessel leasing to field construction, freight services, security provisions and many more. These services remain essential across every phase, encompassing discovery, appraisal, development, and ultimately, successful production. If Namibia is to become a global petroleum pioneer, it’s imperative that local service providers are aligned with international best practices.
In a commendable stride toward a relative correction of the public procurement process, the National Assembly, in April 2023, agreed to launch an investigation into the Central Procurement Board of Namibia’s tender-awarding processes. This proactive step, prompted by concerns voiced by lawmaker Nico Smit, underscores a growing realisation of the need to confront and mitigate the challenges posed by the culture of tenderpreneurship.
Another solution to industry-threatening tenderpreneurship is the establishment of Petroleum Revenue Management Legislation, akin to the model adopted in petrostate Ghana. In principle, this legislation ensures the streamlined collection and allocation of revenues in a manner that’s both sustainable and transparent.
While the Namibian oil and gas industry might not yet possess the maturity for such legislation, the creation of laws that safeguard collective interests remains a priority. To ensure the industry’s enduring growth, the establishment of bodies such as a Local Content Development and Monitoring Board is critical. Such entities would be entrusted with overseeing the quality assurance of regulatory frameworks, gap analysis, capacity enhancement, research and development, and the facilitation of market access for oil and gas entrepreneurs.
As the oil and gas business development unfolds in Namibia, the allure of a quick buck must not eclipse our responsibility to the generations that will inherit the fruits of our actions. By delicately balancing the pursuit of economic prosperity with a resolute commitment to sophisticated, world class business practices and international standards,
Namibia’s oil and gas industry can emerge as a beacon of positive transformation. For this, however, Namibian business practice can and must rise to the occasion.
Bertha Tobias is a Rhodes-Scholar Elect for postgraduate studies at Oxford University. Connect with her at bertha@berthatobias.com
