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Ongoing oil exploration and appraisal activities have propelled the country’s net foreign direct investment (FDI) to N$13.9 billion in the first quarter of 2025, according to the Bank of Namibia.
The surge represents a 28.8 percent increase from the previous quarter and a 14.5 percent rise year on year, underscoring the impact of sustained activity in the country’s emerging oil sector.
“Both yearly and quarterly growth in net foreign direct investment was mainly attributed to increased equity injections in the ongoing oil exploration and appraisal activities,” the central bank says in its first quarter of 2025 report.
The bank also notes that the rise in FDI was supported by intercompany borrowing, particularly within the transport and mining sectors.
In contrast, other investment flows recorded a net outflow of N$2.6 billion, compared to a net inflow of N$5.6 billion in the previous quarter and a marginal outflow of N$4 million in the first quarter of 2024.
The decline was mainly due to the repayment of foreign trade credits by resident companies, especially in the mining and wholesale sectors. It also included a principal repayment by government on its IMF Rapid Financing Instrument loan.
Meanwhile, longer-term trends show a growing appetite for investment in Namibia. According to the United Nations Conference on Trade and Development (Unctad), the country’s inward FDI stock rose to US$10.995 billion in 2024, up from US$9.2 billion the previous year.
“The upward trend in investment reflects renewed interest in Namibia’s mining, energy and infrastructure sectors,” Unctad says in its World Investment Report 2025.
The agency also reports a significant rise in greenfield investment activity.
Announced greenfield FDI projects totalled US$2.2 billion in 2024, up from US$1.2 billion in 2023 and US$576 million in 2022. Namibia recorded 19 greenfield project announcements in 2024, the highest since 2017.
In March, President Netumbo Nandi-Ndaitwah’s weekend cabinet reshuffle will bring oil and gas more directly under her control, as international explorers look to increase offshore discoveries.
Drilling activity has grown since TotalEnergies SE and Shell Plc made initial finds in 2022, even as some have turned out not to be viable for commercial development and written off. Still, the prospect of oil production may boost the sparsely populated southwest African nation.
Nandi-Ndaitwah “sees oil and gas as a strategic factor” for the nation and bringing it under the presidency may make dialogue with explorers more efficient, said Graham Hopwood, a special adviser to consultancy Horizon Engage.
The Mines and Energy Minister Tom Alweendo stepped down from the post he’s held since 2018. Natangwe Ithete was named deputy prime minister and minister of mines in the new cabinet announced March 22.
“The new emerging industries of oil and gas need to be managed in the manner that maximizes benefits for all Namibians” and will fall under the office of the president, Nandi-Ndaitwah said in a statement.
The dismissal of Finance Minister Ipumbu Shiimi, who brought the national debt down, was more of a shock in the cabinet shuffle, according to Hopwood. The move indicates Nandi-Ndaitwah “wants to open the spending taps,” he said.
Shiimi is replaced by Ericah Shafudah, a 20-year veteran of the finance ministry who has held a range of senior positions including executive director of finance.
