The discovery of more crude oil reserves and preparations for presidential elections have sparked an interest in Namibian assets.
The Southern African nation is being courted by major international oil companies following the discoveries of major oil reserves along its coast. At the moment, Namibia is yet to produce any oil or gas but the discovery is already attracting interest from foreign investors.
The interest in the country’s assets is reflected in the gains recorded by the Exchange Traded Fund, which tracks government bonds in Namibia. According to reports, the fund is on track for its biggest yearly gain with a projected 12% in U.S. dollar terms. Also, an ETF tracking the closely watched JPMorgan emerging markets bonds index has gained 3.6% year-to-date.
At least 12 major oil companies have expressed interest in Namibia’s asset since the discovery of the Mapone oil field back in April. TotalEnergies and Shell say they expect production to begin in 2029/2030.
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The preparation for Namibia’s presidential elections has also sparked interest from investors. The elections are scheduled for November 27,2024. Netumbo Nandi-Ndaitwah of the ruling party is considered the front runner in this election and If she wins, she will become the first female president of the country.
The possibility of having a female president has sparked more interest in the country’s politics and economy. The local equity market has gained over 19% in dollar terms while the local currency bounced back gaining 4.5% against the US dollar.
The Namibian dollar halted its four year losing streak while the external reserve rose to almost $1 billion for the first time since 2019.
The discovery of oil has boosted the economic potential of the country as investors watch closely how the presidential polls will pan out. The result of the elections might bring economic changes which will also impact the country’s outlook and growth projection.
