Green hydrogen (GH) could hold the most industrial potential to foster a meaningful structural transformation of Namibia's economic base. To optimise labour prospects for ordinary Namibians emanating from the country's ambitious GH plans, government should fortify its efforts to develop local skillsets to match emerging market demands.
These sentiments were expressed last Friday during an Institute for Public Policy Research (IPPR) presentation themed "the Global Cost of Living Crisis from a Namibian Perspective". The presentation by IPPR Research Associate, Kitty Mcgirr, also noted that excess oxygen and electricity production from GH projects could be used to fill the gaps in domestic consumption demands. In the briefing paper Mcgirr investigated how the cost of living crisis has affected Namibia and suggests strategies and reforms which could mitigate the impact on the most vulnerable.
Mcgirr pointed out that while recently discovered oil is projected to contribute more to Namibia's fiscus, with huge revenues expected after 2030, green hydrogen could actually make a more sustainable contribution in terms of job creation and infrastructure development. She made this analysis based on an increasing number of recent foreign inflows that have been garnered on the back of oil exploration after significant oil discoveries earlier this year alongside large-scale investments in prospective green hydrogen and ammonia production. In his 2023 State of the Nation address, President Hage Geingob stated Namibia had experienced the 'highest year-on-year growth' in foreign direct investment since 2015 and during the first nine months of 2022.
"Beyond developing local technical expertise for the renewable energy sector, government should work to localise value chain linkages through targeted investment in adjacent sectors such as manufacturing and product assembling as well as the service sector in local economies such as Lüderitz which is set to host an influx of industrial workers when Hyphen becomes operational. It would also be beneficial for government to strengthen the legal framework governing the operations of the emerging green hydrogen industry," Mcgirr stated in her presentation.
She added that while political commitments have been made to the inclusion of local expertise, labour, and materials in the industry, ensuring that these benefits are realised in practice will require supporting legislation.
Thus, Mcgirr suggests that the improvement of local content policies (LCPs) comprising legislative and regulatory instruments as well as contracting and licensing arrangements to compel firms to make use of local goods and services is of key importance to these outcomes.
Mcgirr stated: "This is especially critical given the fact that the current LCPs model for the mining sector is characterised by vague qualitative criteria, lax reporting and compliance, and weak implementation and thus 'does not create sufficient confidence that Namibians will benefit' from green hydrogen production. As has already been suggested by the IPPR in relation to the National Upstream Petroleum Local Content Policy, the creation of 'independent oversight bodies' tasked with 'overseeing the selection of pre-approved local suppliers that can be vetted to ensure they have clean track records' would also be advisable with regard to the green hydrogen industry".
Meanwhile, Mcgirr made several policy recommendations that could meaningfully contribute to the cost-of-living crisis in Namibia. These include; improving the efficiency and productivity of government expenditure, promoting agriculture as a labour-intensive industry; Filling the gaps in social protection; offsetting the affordable housing backlog by fast-tracking flexible land tenure and implementing rent controls; and fostering the structural transformation of the economic base and investing in 21st century skills development.
The IPPR research associate noted that "positively, the government appears to have made some progress towards these outcomes over the last 18 months through its pursuit of 'economic diversification and investment promotion into nascent high value industries"'.
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Namibia's expansion of digital, scientific, and technological literacy and other 21st century skills should be key focus areas for government through the extension of opportunities in fields such as "data science and analytics, remote sensing and GIS, programming, mathematical modelling, and engineering". This is according to Jane Olwoch, director of Southern African Science Service Centre for Climate Change and Adaptive Land Management (SASSCAL). Encouragingly, the German government has pledged to support the upskilling of the Namibian population in this regard by availing N$87.7 million to fund both academic and vocational scholarships through SASSCAL's Youth for Green Hydrogen scholarship programme.
In 2022, the United Nations Development Programme estimated that the global cost of living crisis had pushed over 51 million people into extreme poverty at the US$1.90-a-day poverty line with an additional 20 million people falling into poverty at the US$3.20-a-day benchmark. This brings the net cumulative figure to 22.7% of the world's population.
