Staff Reporter
THE Governor of the Bank of Namibia, Ebson Uanguta, has emphasised the importance of coordination among ministries, regulators and public institutions for the success of the emerging oil and gas industry.
“Another clear conclusion from today is that coordination will be essential. The emerging industry cuts across the mandates of ministries, regulators and public institutions. It also involves financial institutions, energy companies, investors, educational institutions, professional service providers and local enterprises. No single institution will possess all the information or expertise required,” Uanguta said.
The governor made these remarks during the recent Oil and Gas Seminar, held in Windhoek under the theme Positioning Namibia’s Financial Sector for a Sustainable Oil and Gas Economy.
He described the seminar as the start of a more structured approach to strengthening coordination across government and regulatory institutions as Namibia prepares for large-scale oil and gas development.
According to Uanguta, collaboration among regulators is particularly important because risks can spread across institutions and sectors. He said common exposures and growing interconnectedness highlight the need for close cooperation between the Bank of Namibia, NAMFISA, the Ministry of Finance and other relevant authorities.
Uanguta also stressed that financial institutions can only participate meaningfully and sustainably in the sector if they fully understand its commercial structures and associated risks. He noted that financing oil and gas projects often involves substantial capital requirements, long investment horizons, complex contractual arrangements, foreign currency exposure and highly specialised technical risks.
“This naturally means that banking institutions will require appropriate expertise, governance and risk management frameworks. Ultimately, participation must remain consistent with institutional soundness and financial stability,” Uanguta said.
The governor added that the industry’s value chain presents financing opportunities across a range of related sectors, including transport, logistics, engineering, accommodation, equipment supply, technology, infrastructure and professional services. However, he stressed that financial institutions must build the necessary capabilities to support these opportunities responsibly.
Beyond banking, Uanguta said Namibia’s sizeable non-bank financial sector also has an important role to play, noting that it manages significant long-term savings that could help finance productive investment.
“Commercially sound opportunities may arise for pension funds, insurers and investment managers to support infrastructure and productive investment associated with the wider energy economy,” Uanguta said.
At the same time, he cautioned that the developmental significance of these investments does not override the fiduciary responsibilities owed to pension fund members, policyholders and investors. He said investment decisions must continue to be guided by thorough due diligence, sound governance, diversification and appropriate risk-adjusted returns.
“This also underlines the need to deepen Namibia’s capital markets. Bonds, infrastructure instruments, private capital structures, guarantees and blended finance solutions can broaden funding sources and reduce excessive concentration on commercial bank balance sheets,” Uanguta said.
He added that regulation must remain forward-looking without becoming permissive. He emphasised that the Bank of Namibia recognises the financial system must evolve as the economy changes.
“New industries create new products, financing structures and risk profiles. Regulation and supervision must, therefore, remain responsive, proportionate and informed by market developments,” Uanguta said.
He stressed that creating an enabling regulatory environment should never be interpreted as weakening regulatory standards.
“The complexity and uncertainty associated with oil and gas activities make strong governance and risk management more important, not less. As a central bank, our responsibility remains to safeguard the stability, integrity and resilience of the financial system while supporting responsible innovation and sustainable economic development.
“Supervisory attention will still need to consider concentration, foreign currency and liquidity risks, large exposures, cross-border financing, operational, environmental and climate-related financial risks, and interconnectedness across the financial system. We must also remain alert to macro-financial effects on domestic liquidity, credit growth, asset prices and foreign exchange demand, and ensure that our frameworks remain fit for purpose,” Uanguta said.
Turning to local participation, Uanguta said success should not be measured solely by ownership levels or the number of contracts awarded to Namibians.
“It should also be reflected in sustainable Namibian enterprises, specialised skills, sound financial management, strong governance and competitive local supply chains. The financial sector can support this objective through suitable products, advice and by helping businesses improve their bankability. At the same time, national importance does not remove the need for disciplined credit assessment. A commercial opportunity is not automatically a bankable proposition. Businesses must strengthen their capabilities, industry must clarify procurement and financing requirements, and financial institutions must respond while preserving prudent underwriting standards,” Uanguta said.
Photo: Bank of Namibia.
