Namibia stands at a pivotal crossroads where the promise of offshore oil and gas discoveries must be translated into tangible national prosperity through deliberate financial sector preparation, according to a former Governor of the Bank of Namibia and Minister of Mines and Energy.
In a keynote address delivered at a Bank of Namibia seminar, Tom Alweendo issued a sobering assessment of the gap between resource discovery and genuine development, warning that without deliberate action, the oil and gas sector could pass through Namibia rather than belong to it.
“The distance between discovery and development is not travelled by geology. It is travelled by institutions, capital, skills, discipline and trust,” Alweendo said, speaking at the central bank’s seminar on preparing Namibia’s financial sector for a sustainable oil and gas economy.
The former Governor, who held the central bank’s top post before serving as Mines and Energy Minister, brings a rare dual perspective to the national conversation. He acknowledged that banking is built on prudence, with institutions lending on the basis of risk, capital adequacy, governance and repayment capacity.
However, he also warned that when a country discovers a strategic natural resource, it cannot afford to be a spectator in its own development.
The central challenge, Alweendo argued, is that Namibia’s banking sector was built around the economy the country has had – households, mortgages, instalment finance, trade and conventional commercial lending – rather than offshore oil development. Upstream oil and gas is capital-intensive, technically complex, foreign-currency based and exposed to long timelines, geological uncertainty, commodity price risk and environmental responsibility.
If local banks and other financial institutions remain outside the oil and gas sector, Alweendo cautioned, the financial value chain will be captured elsewhere. Advisory fees will be earned elsewhere, project structuring will happen elsewhere, and local companies may win contracts on paper but fail to deliver because they cannot obtain working capital, equipment finance, guarantees or insurance support.
“The real task is not to make banks less prudent. It is to make the sector more bankable,” Alweendo declared, offering what may be the most practical framework yet for local financial sector participation in the emerging oil and gas industry.
Three Layers of Opportunity
The former Minister outlined a tiered approach for local banks to engage with the sector responsibly. The first layer is supplier and contractor finance – the most immediate and practical entry point where Namibian companies that win service contracts need working capital, receivables discounting or foreign exchange services.
“This is not speculative oil finance. This is contract-backed banking,” Alweendo emphasised.
The second layer involves oil and gas industry-cluster finance, encompassing housing, training centres, workshops, shore bases, logistics systems and supporting infrastructure – assets local banks and institutional investors can understand because they have physical form, broader economic use, and can support other sectors.
The third layer is participation in larger syndicated finance, where Namibian banks can participate in smaller, well-secured tranches alongside international banks. “That is how knowledge is transferred. That is how confidence is built,” Alweendo said.
Addressing Historical Exclusion
Perhaps most significantly, Alweendo addressed the critical issue of economic inclusion, noting that Namibia’s current economic ownership structure was shaped by history where the majority of people were deliberately excluded from meaningful participation in the commanding sectors of the economy.
“If the oil and gas sector develops without deliberate financial inclusion, it may simply reproduce old patterns of ownership under a new sectoral name,” he warned.
Alweendo called for structured, risk-managed inclusion where credible companies owned by previously-excluded Namibians have proper contracts, competent management and a clear path to delivery. He argued that lack of inherited collateral should not become a permanent barrier, and that empowerment must become measurable, bankable and real.
A Call for Policy Clarity
The former Governor also directed pointed advice at policymakers, noting that financial institutions cannot lend or invest into fog. They need a petroleum policy framework that is clear, stable and predictable; local content rules that are ambitious but practical; and clarity on taxation, environmental obligations, procurement expectations and dispute resolution.
“A bankable policy framework does not mean a weak national-interest framework. It means the national interest is defined clearly enough that investors, banks and citizens can understand it,” Alweendo stated.
He cautioned that unclear rules do not empower the nation but empower discretion; unrealistic rules do not build local content but produce fronting; and slow processes do not protect sovereignty but destroy opportunity.
Preparing for First Oil
For banking executives, Alweendo delivered a clear warning: do not wait for first oil before learning the industry. “By the time first oil arrives, many relationships will already be formed. Procurement systems will be in place. International banks will already be embedded. Local banks that wait for perfect certainty may find that the market has moved without them,” he said.
He called on the Bank of Namibia to play a catalytic role – not instructing banks to lend irresponsibly or directing credit in a way that weakens market discipline, but convening, guiding and clarifying prudential expectations, concentration limits, foreign-currency exposure and systemic implications.
A Framework for National Action
Alweendo proposed a coordinated national effort bringing together all stakeholders to identify where Namibia’s financial sector can participate responsibly in the oil and gas value chain, what risks must be managed, what policy and regulatory clarity is required, and how credible Namibian firms can be made finance-ready.
The seminar, he urged, should produce a roadmap with assigned responsibilities and regular progress reviews to assess what has been financed, what constraints remain, and who is accountable for removing them.
“At moments like this, countries reveal their character,” Alweendo said. “Some countries discover natural resources and become divided by them. Some become careless because of them. Some become dependent on them. Some allow them to weaken institutions. Some allow a few to benefit while many remain spectators.”
“Other countries make a different choice. They use natural resources to build capacity. They strengthen institutions. They invest in people. They deepen local financial markets. They create industries around the resource, not only revenue from the resource. They turn a temporary commodity opportunity into lasting national capability. That must be our choice.”
Alweendo concluded by framing opportunity as an invitation to prepare and cooperate, build national capability, and ensure that when the story of Namibia’s oil and gas sector is told, it is not only a story of what was found beneath the sea, but of what was built on land.
“We prepared. We participated. We governed wisely. We built. And we turned promise into shared prosperity,” he said, offering a vision of what Namibia can achieve with deliberate, prudent and inclusive financial sector preparation.