Plans for Nigerian billionaire Aliko Dangote's N$2.4-billion oil storage facility at Walvis Bay and a proposed fuel pipeline to Zimbabwe have been met with caution.
National Planning Commission (NPC) director general Kaire Mbuende confirmed the plans yesterday, as opposition parties warn the project could threaten local trucking and downstream businesses.
Dangote, one of Africa's richest men, is seeking to expand his footprint in southern Africa's energy sector.
Last Wednesday, he met with Zimbabwean president Emmerson Mnangagwa in Harare, where the two reportedly discussed the proposal to construct a 1 838km fuel pipeline stretching from Walvis Bay to Bulawayo, Zimbabwe's second-largest city.
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In a short video clip published on YouTube by Africanews, Dangote said: "We have the largest refinery in the world in Nigeria, we are going to bring it to Walvis Bay. There are a couple of other investments we are looking at."
The Cabinet approved the project, which is expected to cost about N$2.4 billion, in September.
"Before the pipeline is put in place, trucks and rail will be used, generating benefits for Namibia. Using Namport's infrastructure also comes with fees, and given the expected volume of oil to Zimbabwe, Botswana, Zambia, and the Democratic Republic of Congo (DRC), it will generate substantial revenue for the country," Mbuende said.
Construction is expected to begin once negotiations are concluded.
"The land is already reserved at the north port at Walvis Bay. It is just a matter of finalising some details, and from their side, they want to do this as quickly as possible," Mbuende said.
Dangote's oil storage comes almost five years after the National Petroleum Corporation of Namibia (Namcor) took charge of the N$5.6-billion national oil storage facility, which is not operating at full capacity yet.
The proposed pipeline from Walvis Bay to Zimbabwe will transport various petroleum products, including petrol, diesel, and kerosene, to meet regional market demands, Mbuende said.
He said the project would comply with Namibian environmental standards and would require an environmental clearance certificate before construction begins.
Mbuende said the oil storage facility will be large, creating significant job opportunities during construction.
'REGIONAL HUB'
During Dangote's visit to Namibia in June, he shared his intention to use Namibia as a regional hub to supply fuel to neighbouring countries such as Zimbabwe, Zambia, Botswana, and potentially the DRC, Mbuende said.
"Namibia is strategically located on a straight line from Lagos to Walvis Bay, giving Walvis Bay an advantage over many other places," Mbuende said.
He said Dangote intends to invest about US$140 million (N$2.4 billion) to establish a tank farm at Walvis Bay, primarily for the regional market.
Negotiations have already started regarding land for the project, which is owned by Namibia Ports Authority (Namport).
"We put them in touch with Namport so they can lease land to set up their infrastructure. From the side of the government, I am overseeing the project to ensure it comes to fruition," Mbuende said.
He said countries like Botswana, Zambia, Zimbabwe, and the DRC already make use of the port of Walvis Bay.
"These are natural links," he said.
Namcor spokesperson Paulo Coelho yesterday referred The Namibian to the Ministry of Industries, Mines and Energy.
THREAT
Popular Democratic Movement leader McHenry Venaani has warned that the proposed pipeline could threaten Namibian downstream businesses if local safeguards are not enforced.
He says the pipeline, while potentially valuable infrastructure, could undermine Namibia's existing transport and logistics economy.
"The construction of the pipeline is a vital tool, but Namibia must remember that by building that pipeline, the country is going to lose a number of downstream business ventures," Venaani cautions.
"The trucking business that is taking fuel from Namibia to the interlands, the very big economy that runs our service stations, our ports, our cross-cutting sectors ... these all stand to be affected."
He says any such deal must prioritise Namibian participation and economic benefit.
"If such a contract is extended to build such infrastructure, 70% of it must be done by Namibian companies, Namibian labourers," he says.
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"And of course we must also know what the profit-sharing formula is. What are we going to profit as a country that has put down the pipeline going through here?"
Venaani criticises the government for what he describes as excessive secrecy around its engagements with Dangote.
"I think the government is mum on Dangote's dealings, despite him being a big investor. And when it has to do with oil and everything, the government is overly secretive," he says.
"I was surprised to hear Dangote wants to build a pipeline in Namibia, yet when he was here, he only spoke of a storage facility. So I think we need to open up a little bit going forward," Venaani says.
Republican Party leader Henk Mudge describes the proposed project as a pie in the sky.
"I don't think it's viable. It doesn't make sense, because if you transport oil to another country with a viable economy, it would make sense, but to take it to Zimbabwe is just ridiculous," he says.
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