There’s a new word in Southern Africa for oil – Namibia. Since the discovery of significant reserves of crude and gas a mere five years ago, the industry has exploded on all fronts. Namibia now boasts the largest reserves in Africa and has joined the ranks of major oil exporters.
Competing with its Northern neighbour Angola has not proved difficult. Despite climate change, there is an insatiable demand for oil and gas, not only world wide, but right on Namibia’s doorstep.
South Africa, still the largest economy on the continent and boasting the most developed infrastructure, has been a petroleum importer for seven decades. Blessed with many resources, but no oil, South Africa has become the world leader in coal-to-liquid gasoline production.
Now that the biggest oil nation in Africa is right next door, South Africa is the port of call for refining and distribution. Pipelines have already been laid to Cape Town for gas, and a new refinery built on South Africa’s west coast.
Energy scarcity has plagued the region for the last 25 years, despite huge reserves of coal and uranium. Scenic Cape Town in particular has had to rely on Africa’s only nuclear power station to meet its electricity needs. Now that gas is in plentiful supply from friendly neighbour Namibia, a new energy-led boom is in the offing.
Namibia was once under the control of South Africa, and had its currency linked to the SA Rand since independence. Now the tables are turned, and the Namibian Dollar is expected to appreciate as exports grow. From being the poor cousin to South Africa, Namibia is becoming the rich uncle.
But there’s a dark side to this windfall. Will its historical ties and democratic constitution keep it benign, or will its new found riches thrust Namibia into the morass of corruption and conflict seen in other African oil states?