Namibia invests oil revenues in its sovereign wealth fund

Legislation is currently being prepared to regulate the allocation of oil revenues to Namibia's sovereign wealth fund, to ensure that the benefits of these resources accrue to future generations. According to Bloomberg, Namibia's Minister of Finance, Ipumbu Shiimi, has confirmed that Namibia will allocate a significant portion of anticipated revenues from the country's recently discovered oil fields to the country's sovereign wealth fund.

Minister Shiimi said, "New legislation is being drafted to specify the percentage of oil revenues to be paid into the sovereign wealth fund, as well as the investment strategies for these funds. Given the scale of the expected revenues, it is essential to put in place an effective mechanism to collect and manage these resources so that they benefit future generations."

In recent years, TotalEnergies and Shell have announced significant oil discoveries offshore Namibia. Notably, the Venus field, explored by TotalEnergies, was estimated by consultancy Wood Mackenzie in February 2022 to contain at least 3 billion barrels of recoverable oil, positioning this discovery among the largest in sub-Saharan Africa. In addition, other onshore discoveries reinforce the prospect of Namibia becoming a major new oil production center in Africa.

Production is scheduled to begin in 2030 and promises to transform the economy of this country of less than 3 million inhabitants. "It's premature to speculate, but substantial discoveries could radically change the structure of national revenues," said Mr. Shiimi, pointing out that final investment decisions from TotalEnergies and Shell are expected before the end of the year.