Namibia – Do the oil discoveries herald a more inclusive economy?

Namibia is on the brink of a major change which is set to radically transform its economy.Indeed, the recent discoveries of vast oil reserves could propel the country among the leading African producers. The country has geared up for this windfall by setting up a sovereign wealth fund based on the Norwegian model. The objective is to invest these revenues over the long term, thereby cushioning the economy from global fluctuations in commodity prices and contributing to a better distribution of wealth. These discoveries are already transforming its balance of payments, with the massive flows of foreign direct investment and the imports of goods and services related to this activity. However, this course is likely to increase the country’s vulnerability to the low-carbon transition by maintaining the economy in its extractive framework.