The Oil “Curse” and Namibia’s Critical Crossroads

In 2014, Zack Beauchamp wrote an article titled, The Oil Curse: How Black Gold Makes Countries More Authoritarian, Corrupt, and Violent. This concept has since been discussed extensively, and numerous reports over the years have highlighted the adverse impacts of oil wealth on nations, particularly in Africa. Namibia is now at a critical juncture, and it must tread carefully to avoid the pitfalls that many oil-rich countries have faced.

The excitement surrounding Namibia’s oil discoveries is palpable, yet it is essential to question whom these riches will truly benefit. While there is undeniable optimism about the potential of oil wealth, there are equally profound risks that could severely hinder the country’s long-term development. Based on over two decades of business experience in Africa, I have witnessed firsthand how the allure of “black gold” can derail a nation’s growth and worsen its social and economic challenges.

The Danger of Resource Wealth

History shows that the wealth generated by natural resources, such as oil and gas, can often lead to unintended consequences. The primary beneficiaries tend to be the political elite and the upper class, while the majority of the population sees minimal improvement. In some cases, the lower class may experience an exacerbation of their hardships, as the focus of wealth is directed upwards, not outwards.

Namibia, with its relatively small population of just 3 million, is poised to extract significant value from its oil reserves. However, without careful management and inclusive governance, we could find ourselves in a situation where the majority of citizens are left behind. The gap between the rich and the poor could widen dramatically, with the marginalized communities seeing little benefit, or even greater deprivation, from the oil boom.

The Social Fallout

A foreseeable consequence of rapid oil wealth in Namibia is the exacerbation of inequality. As has been observed in other oil-producing nations, such as Angola, the development of critical infrastructure often lags behind the influx of oil revenue. The wealth generated can lead to an explosion in the number of informal settlements, widespread poverty, and an underdeveloped urban landscape. In Angola, for example, despite being one of Africa’s largest oil producers, the country has struggled with high levels of poverty, a lack of basic services, and infrastructure deficits.

In Namibia’s case, the impact on the lower-income population could be severe. Without substantial investment in social infrastructure—such as housing, sanitation, and healthcare—the country could experience a rapid increase in informal housing (shacks), inadequate sanitation systems, and severe shortages of electricity and clean water. The oil boom may simply not translate into improved living conditions for the majority of the population.

Economic Vulnerability

Another critical concern is Namibia’s potential over-reliance on oil exports. With an economy increasingly tied to the volatile global oil market, Namibia could find itself at the mercy of fluctuating oil prices. If the price of oil were to drop significantly, the country could experience an economic downturn, affecting everything from job security to the affordability of basic goods and services. Moreover, a lack of diversification in the economy—where the focus is placed heavily on oil extraction—could leave Namibia vulnerable to economic instability and external shocks.

A “dollarized” economy, in which the value of the local currency becomes secondary to the price of oil, could further compound these issues. The day-to-day cost of living could skyrocket, leaving many Namibians unable to afford essential goods and services, while the country’s self-sufficiency could erode as imports rise.

Lessons from Africa’s Oil-Producing and mineral wealth Countries

The experiences of Angola, Nigeria, DRC, Mozambique and other oil- and natural gas rich African countries provide cautionary tales. Despite vast natural resources, these nations have faced political instability, authoritarian governance, corruption, and social unrest. In Angola, despite the country’s daily production of over a million barrels of oil, the wealth has not been distributed equitably, and many citizens still lack access to basic services. A colleague in Luanda once told me, “As soon as Namibia starts pumping oil, it will follow the same path as Angola, and there is nothing you can do about it.”

Such statements, though sobering, are worth considering. While it’s easy to dismiss the notion of repeating Angola’s experience, it’s crucial to be aware of the real risks involved. Without strong governance and prudent management, Namibia could find itself on a similar trajectory, despite its current differences in governance and infrastructure.

The Path Forward: A Call for Responsible Leadership

The decisions Namibia makes today will shape its future for generations. As citizens, we must ask ourselves what kind of country we want to leave behind. The choices we have made in this election will determine whether Namibia embraces a future of widespread prosperity or one of deepened inequality and instability. If the wealth from oil is not managed in a way that benefits all Namibians, the country could face a future where the divide between the rich and poor becomes insurmountable, and the social fabric frays irreparably.

This is not a message of despair, but of caution. I remain an optimist, believing that with the right leadership, Namibia can navigate the complexities of oil wealth and build a future where all citizens have access to a good quality of life. The key lies in making informed decisions, choosing leaders who prioritize the well-being of the entire population, and ensuring that Namibia’s oil wealth is used to build a diversified, resilient economy. The current controversy in our election process has never been experienced at this scale before in Namibia. We registered only 1.4 million eligible voters and we are still counting votes, irrespective, there are so many controversial issues at the centre of the election results debate. Confusion reigns and tempers are flaring up. In my informed opinion it’s because of the

promise of future wealth and we are already starting to fight amongst each other. Always remember people only fight in two examples, when there is too much wealth (or the promise), and when there is too little wealth. In the middle peaceful coexistence usually prevails. Also remember that everybody that now shows a keen interest in Namibia and our internal affairs, are not necessarily our friends. We now have more enemies than friends.

A Call to Action: Your Responsibility as a Citizen

As we approached this election, we had to ask ourselves two fundamental questions:

What have I contributed to my country in the last 35 years, with the resources and means at my disposal?

How will I commit to Namibia and its people over the next 35 years?

If you can answer both these questions with a clear conscience, and without shame, you are likely a true patriot. However, if there is uncertainty or hesitation, it may be time to consider whether new leadership could bring a fresh approach to the challenges ahead.

Namibia is at a crossroads, and we have but one opportunity to choose the right path. The consequences of mismanagement are clear, but with vigilance and the right choices, Namibia can avoid the mistakes made by others. This is not a time for complacency—it is a time for action, for leadership, and for ensuring that Namibia’s future is one of equity, opportunity, unity and prosperity for all. We have so much to fix before we can even think of embarking on a new future. Based on what I have personally experienced in Africa and considering it’s history, I am truly worried of what the future holds for us and our democracy. Again, let’s not despair, I remain an eternal optimist. If we do things right religiously as from this very moment, Namibia will remain the most beautiful country in the world and we will grow from strength to strength.