Oil wealth fuels debt row
Namibia's emerging oil industry has become the focus of a growing debate over whether the country should borrow against future petroleum revenues to accelerate development or wait until production begins before taking on additional debt.
The discussion intensified after the Independent Patriots for Change (IPC) accused National Planning Commission director general Kaire Mbuende of contradicting Bank of Namibia governor Ebson Uanguta on the issue.
Speaking during stakeholder engagements in the Oshana Region, Mbuende argued that Namibia should not delay development projects while waiting for oil production to begin. He said the country could borrow against anticipated future oil and gas revenues to finance infrastructure and other priorities now, rather than postpone investment until the first barrels are produced.
His remarks came just weeks after Uanguta cautioned against relying on expected oil wealth to justify additional borrowing.
Addressing a public discussion in June, the central bank governor said Namibia should not borrow "in the name of oil", even if a major commercial discovery were announced the following day, warning that future resource revenues should not be treated as guaranteed income.
The warning comes as Namibia's debt burden remains elevated. Public debt stands at 65.2% of gross domestic product, equivalent to N$174.6 billion, with the Bank of Namibia warning it could rise to around 70% by the end of the financial year unless fiscal consolidation measures are maintained.
The IPC said Mbuende's proposal risked repeating mistakes made by several resource-rich African countries that borrowed heavily before oil production generated sufficient revenues.
The party pointed to Angola, South Sudan and the Republic of Congo as examples where borrowing against expected oil income contributed to high debt burdens and reduced fiscal flexibility when oil prices fell or production failed to meet expectations.
It argued that Namibia should avoid any oil-backed borrowing until there is greater certainty over future production.
According to the IPC, that certainty should include TotalEnergies reaching a final investment decision on its Venus development in the Orange Basin, together with the enactment of petroleum revenue management legislation setting out how future oil income will be collected, saved and spent.
