KEY POINTS
- Namibia and Botswana are advancing a joint oil refinery to reduce reliance on imported fuel, which cost them a combined $2.6 billion in 2023, while diversifying economies strained by declining diamond revenues.
- The project forms part of a regional energy push, leveraging Namibia’s offshore oil discoveries and Botswana’s strategic partnerships to mitigate economic vulnerabilities linked to synthetic diamond competition.
- Challenges include securing $4 billion in funding, addressing environmental concerns, and navigating logistical complexities, with feasibility studies slated for completion in 2025.
Southern Africa is poised to bolster its energy independence as Namibia and Botswana advance plans for a jointly owned oil refinery, a landmark project aimed at reducing reliance on costly fuel imports and strengthening regional collaboration.
The initiative, discussed during Namibian President Netumbo Nandi-Ndaitwah’s recent visit to Botswana, marks a strategic pivot toward economic diversification and infrastructure development in two nations historically dependent on diamond revenues.
The proposed refinery, details of which remain under negotiation, would address soaring energy import costs for both countries. In 2023, Namibia spent
“The two leaders agreed that bridging the gap between the ‘haves and the have-nots’ and the fight against poverty through job creation required urgent and concrete programmes and projects to be implemented by both countries,” read a joint statement from the presidents’ offices. Analysts suggest the refinery could slash import bills by up to 40%, redirecting savings toward healthcare and education.
Moving beyond diamonds to secure economic future in energy
Botswana and Namibia, which together account for nearly 30% of global diamond production, face mounting pressure to diversify their economies as synthetic diamonds erode market demand.
Botswana’s Debswana slashed output by 25% in 2024, while Namibia’s Debmarine plans further cuts in 2025. “As diamond-producing countries, [we] need to work together to maximise revenue and value from diamonds,” the statement emphasized, underscoring the urgency of transitioning to sectors like energy and manufacturing.
Business Insider Africa reports that the refinery project aligns with broader regional trends, as Mozambique, South Africa, and Namibia ramp up oil and gas exploration. Namibia’s recent offshore discoveries by TotalEnergies and Shell—estimated at 11 billion barrels of oil equivalent—have positioned it as a future energy hub. Botswana, though lacking proven reserves, seeks to leverage its neighbor’s resources and strategic partnerships.
Environmental groups, however, warn of ecological risks. Namibia’s Benguela Current, a biodiverse marine ecosystem, could face threats from offshore drilling. Meanwhile, financing the refinery—projected to cost $4 billion—remains a hurdle. Both nations are courting investments from the African Development Bank and Middle Eastern sovereign funds, with feasibility studies expected by late 2025.
