The Economic Policy Research Association (Epra) says the national upstream petroleum local content policy favours the politically connected over ordinary Namibians.
Epra managing committee member Eben de Klerk describes the policy as "dressed up to create the impression of benefiting a broad base of Namibians" while it is actually designed to be a channel for enriching the politically connected.
He says the focus of the policy should be on ensuring that oil and gas companies procure from Namibian companies that produce goods and services in Namibia, and that Namibians are the owners, employees and beneficiaries of these projects.
"However, the focus is rather on ensuring that previously, but not currently, disadvantaged Namibians get another free ride in a sector they do not have knowledge or expertise on, and thus will not provide actual goods or services, but will be middlemen outsourcing to foreign entities and will not see maximum benefit to Namibians," De Klerk says.
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The Petroleum Upstream Unit in the Presidency is currently conducting a nationwide consultative process on the draft national upstream petroleum local content policy for the exploration and production of the oil and gas sector.
The consultations are to ensure local communities have a meaningful say in shaping the final policy. The consultations will run until 17 September and are expected to cover all 14 regions.
Approved by the Cabinet in late 2024, the policy encourages a framework that prioritises local suppliers, reduces reliance on foreign expertise, and integrates Namibian businesses and workers into the petroleum value chain to achieve economic growth and improved quality of life for its citizens. Upstream Petroleum Unit deputy head Carlo McLeod said the government is committed to collaboration, skills development, job creation, and empowering local businesses.
"The draft policy is designed to build a globally competitive sector, increase Namibian ownership, and promote financing and business opportunities across the value chain. It emphasises skills transfer, technology adoption, and value extraction through backwards, sideways, and forward linkages," he says.
Economic policy analyst Robin Sherbourne says there should be room for growth and development within policies as one-size-fits-all local content policies have become outdated as industries develop and local suppliers grow.
Sherbourne says companies will buy locally where it makes commercial sense to do so, and that encouraging middlemen raises costs and corruption. "The government can negotiate tailored local content on a project-by-project basis, and this can change over time as Namibia's industrial base develops and more projects come on stream," he says.
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The same criticism was raised by Namibian Association for Offshore Oil and Gas Service Providers founder Knowledge Ipinge.
He says the country has already been facing cases of fronting, where foreign companies use Namibians to meet local requirements.
"The policy lacks provisions for mandatory shutdowns, financial penalties for violations and blacklisting of those foreigners who exploit Namibians.
"We are already observing serious fronting risks, spearheaded by foreign companies that use desperate Namibians to meet local requirements," Ipinge says. Petroleum commissioner Maggy Shino last year issued an ultimatum to prospective companies saying local content is mandatory, and that the Namibian government will not compromise on providing opportunities for its people to participate meaningfully in the industry. The current draft policy reflects this commitment as it requires oil and gas licence holders to produce an annual local content plan, which will include a section on procurement detailing the involvement of local firms in supplying goods and services. In response to Epra's criticism Shino says the government will take the comments as positive input on the policy. "We will review them with an outlook of amending the policy to reflect the currently disadvantaged Namibians and ensure that the benefits are targeted to all," she says.
