Namibia Reaches Highest FDI in a Decade

Namibia has garnered significant global attention due to the quantity and quality of its recent oil discoveries in the Orange Basin. These hydrocarbon discoveries have played a crucial role in driving record foreign direct investments (FDI) through equity injections for exploration activities and the uptake of intercompany loans.

FDI represents an ownership stake in a foreign company or project made by an investor, company, or government from another country. It is a key element in international economic integration, creating stable and long-lasting links between economies.

According to Selma Namutuwa, the Namibia Investment Promotion and Development Board (NIPDB) manager of investment attraction, Namibia attracted N$73 billion in FDI inflows between 2021 and 2023. Of this amount, approximately 45%, or N$33 billion, is attributable to the oil and gas sector.

“Namibia experienced a notable surge in FDI inflows during the second quarter of 2023, reaching N$13.5 billion. This marked the highest level observed in more than 10 years. The substantial increase was primarily propelled by investments in mineral exploration, hydrocarbons (oil and gas), and the acquisition of Namibia Breweries Limited (NBL) by Heineken,” Namutuwa said.

Namutuwa made these remarks last week during the Tanzania-Namibia investment and trade forum. Namibia and Tanzania share a long-standing relationship, grounded in political and economic cooperation. The forum aimed to enhance investment and trade cooperation between the two countries, particularly in the agriculture (livestock), mining, tourism, and fishing sectors.

According to FDI Intelligence, which evaluates FDI and macroeconomic trajectories of the top 50 destinations worldwide, Namibia has registered high investment momentum for the year. 

“Over the year, Namibia’s direct investment liabilities rose mainly due to equity injections for oil and gas exploration and appraisal activities. Lower FDI inflows were observed on a quarterly basis due to a reduction in the uptake of intercompany loans extended to domestic subsidiaries operating in the mining sector, as well as lower retained earnings by foreign-owned entities,” stated the Bank of Namibia in its quarterly bulletin.

Namibia announced its first noteworthy oil discoveries off the coast by Shell and TotalEnergies in 2022. Once the commercial viability of these discoveries is verified, these hydrocarbon detections have the potential to benefit the domestic economy with billions of dollars in revenue.

Furthermore, Namutuwa told potential investors at the gathering that Namibia’s mineral beneficiation strategy advocates local value addition to ensure that more people benefit throughout the entire value chain from the country’s national resources.

Promoting the country, she highlighted investment opportunities in the mining sector that currently lie in the exploration of mineral deposits, processing of critical raw materials, and general and specialised services.

Namutuwa also promoted Namibia’s meat sector, urging investment opportunities in various aspects, including feedlot development, animal fodder and feed production schemes, meat-processing (value-addition hub), and corned meat production (cannery).