• Business 7

‘Pregnant with potential’

- 2023-03-29 00:00:00

Staff Reporter - Research conducted by global management consulting firm McKinsey & Company, in conjunction with government, estimates that a full deployment of Namibia’s Synthetic Fuel Strategy could result in 84 000 direct jobs from activities that include electrolyser assembly, wind and solar farm construction and pipeline operation.
In addition to this, 60 000 jobs related to concrete manufacturing, basic metals manufacturing and outsourced business services are estimated to be unlocked. Finally, using the social accounting matrix, 136 000 jobs are estimated to be induced with restaurants, homebuilding, car manufacturers, clothing manufacturers and others identified as potential contributors to this number.
The strategy further estimates that Namibia’s gross domestic product (GDP) could expand by 34% in real terms by 2030 and by 50% by 2040), compared to 2021.
“These opportunities, no matter how remote, are worthy of serious pursuit,” says James Mnyupe, economic advisor to President Hage Geingob and Namibia’s first green hydrogen commissioner.
Critical endowments
Namibia has an opportunity to draw on a number of natural resource endowments that are critical for the world’s transition to a net-zero economy, Mnyupe says.
“In particular, Namibia has world-leading wind and solar energy resources that can form the backbone to establishing a competitive green industrial economy. Namibia’s own emerging experiences with green hydrogen investment opportunities are testament to this possibility.
“Moreover, Namibia has substantial deposits of rare earth, lithium and other minerals which are critical to the energy transitions and have seen substantial price increases over the past five years.
“In addition to that, Namibia’s invasive encroacher bush and its potential for hosting abundant forests of seaweed mean that Namibia may be able to unlock sustainable sources of carbon which when combined with the green hydrogen molecule and other ingredients, could enable Namibia to manufacture low carbon synthetic fuels,” he says.
These resources, combined with Namibia’s proximity to some of the continent’s largest economies and access to excellent maritime transport corridors, provide Namibia with a rich basket of building blocks, Mnyupe says.
Impactful
In turn, these opportunities allow government to consider the possibility of incubating impactful green industrialisation opportunities that could generate significant economic and – critically – employment opportunities.
Turning this strategy into reality will require a whole-of-government approach, Mnyupe says.
“To this effect, the Namibian government in partnership with its development partners, including the Dutch government, the German government and the European Commission, have started developing a donor-funded implementation programme that will bring together the best experts in this field from Namibia and abroad to help Namibia prioritise and operationalise the necessary concrete strategic steps.
“The mobilisation and scaling of a green industrial economy will commence with identifying and scoping and then advancing of key priority pioneering projects,” he says.
Mnyupe continues: “A list of energy-intensive industries that would benefit from low-cost electrons and molecules in Namibia would be the starting place and refined over time by considering industry insights (current drivers of plant location, trade volumes, etc.), additional regional benefits (e.g. regional inputs sourcing) and interviews with leading industrial players to stress test attractiveness and feasibility of locating plants in low-cost regions.
“Each new project and industry adds assets and capabilities (e.g., common infrastructure, excess electricity) that can be leveraged into the next industry and project.
“Also, green industrial sectors will scale at different points in time in the coming years. Namibia needs to know which industries to pursue, when and how one can support growth of the other.
“The objective would be to provide a clear view on that sequencing and timing, and highlight the critical links from one industry that support the next such that Namibia can gear towards progressive accumulation of productive capacities, well-targeted ‘long jumps’ and know-how agglomeration,” Mnyupe says.
Examination
The risks and socioeconomic opportunities for Namibia stemming from these opportunities will need examination, he says.
“In particular, we will consider various issues including, how the scaling of each major industry could impact the economy (GDP, trade balance, etc.) and jobs, including market demand to scale-up local SMEs (e.g., construction firms) and JV or other technology transfer opportunities.
“Key resource needs including land, need for specialised labour, or financing needs will be identified early and key stakeholders prepared to unlock these through various policy actions.
“Key risks such as environmental, supply-chain dependencies, technology and trade-related obstacles are some of the risks that will need mitigation.
“By combining the risks and opportunities, we will determine the relative value of industries (jobs, GDP, margins, risk exposure) and thus help to determine the right relative allocation of resources to these industries (e.g., land, government attention, financing, etc.).
“We will use these findings to suggest which level of government ownership and leadership might be optimal for each type of opportunity and which ones can be fully driven by the private sector. This analysis will support the design of a ‘Strategic Land Allocation Framework’ for Namibia,” Mnyupe says.
Myriad of players
To advance priority projects will require the coordinated engagement of a myriad of players including, project owners, key equipment suppliers, off-takers, foreign governments, various financing institutions amongst a few, he says.
“The Namibian Government is signalling its thinking early because we would like to enable the ordinary Namibian to best prepare to get involved in areas they are best equipped to contribute to.
This initiative will help kick-start a two-year effort designed to lay the foundations for green industrialisation in Namibia. John Heywood once said ‘many hands make light work’,”Mnyupe says.
According to Mnyupe: “Namibia is pregnant with potential and to birth this envisioned green industrial revolution, its citizens will need to move together as one nation.
“With the support of the President and Cabinet, I intend on serving Namibia over the next two years to realise this ambition and create a strong foundation for a viable pathway towards the goals of Vision 2030, which though ambitious should never be allowed to become out of reach,” Mnyupe concludes.