Namibia is buzzing with talk of oil, gas, green hydrogen and new mining projects. Yes, the future looks promising. But before we get carried away, we must understand a dangerous economic trap called Dutch disease.
Don’t worry — it’s not a medical problem and it doesn’t involve tulips. It’s simply what happens when a country becomes excited about one big resource and, without realising it, weakens the rest of its economy.
Let me explain it in everyday language.
What is Dutch Disease? (The Milton version)
Imagine you’re selling tomatoes at the market. Then a new stall opens selling diamonds. Suddenly everyone is chasing diamonds.
What happens?
Prices rise.
Wages rise.
The currency becomes stronger.
Tomato farmers can’t compete.
Soon, only diamonds matter.
Until the price of diamonds collapses — and then everyone suffers.
That’s Dutch disease.
Namibia is at risk if we don’t prepare properly.
Why Namibia Must Pay Attention
We’ve seen this story across Africa and beyond. A country discovers oil or minerals, gets a burst of cash, and then:
Agriculture and manufacturing decline
Small businesses struggle against cheap imports
Government overspends
Jobs don’t grow for ordinary people
When the commodity price drops, the whole economy crashes
Namibia can avoid all this. But we must act early, not when the crisis arrives.
What Namibia Must Do to Protect Itself
1. Save before we spend
If you receive a bonus at work, you don’t use it all in one day. The country must do the same.
Namibia needs a proper, well-governed Sovereign Wealth Fund — not political window dressing, not a quick-cash machine.
It must have strict rules:
Save most of the resource income
Only a small, predictable amount goes into the annual budget
Independent professionals oversee it
Full public transparency
If we don’t save, we will overspend, push up prices, and weaken our own industries.
2. Keep the Namibia Dollar from becoming too strong
This part needs a clear explanation, especially because Namibia is part of the Common Monetary Area (CMA) with South Africa, Lesotho and Eswatini.
What does CMA membership mean?
Our Namibia Dollar is pegged 1:1 to the South African Rand.
We cannot independently let our currency weaken or strengthen.
If foreign money pours into Namibia, we can’t simply adjust the exchange rate ourselves.
So what can we do?
How Namibia can still limit real appreciation under the CMA
Even with the fixed peg, we have tools:
Build foreign reserves through the Bank of Namibia.
Channel resource revenue abroad via the Sovereign Wealth Fund.
Avoid excessive government spending, which pushes up local prices and wages.
Coordinate closely with the South African Reserve Bank on liquidity and capital flows.
In simple terms:
We cannot change the exchange rate — but we can control the pressure that makes prices rise too fast.
If we don’t manage this, agriculture, manufacturing and exporters will struggle, because their products become too expensive compared to imports from South Africa and the rest of the world.
3. Protect and grow the sectors that employ people
Oil and gas do not create enough jobs. If we rely on them alone, unemployment will stay high.
We must strengthen the industries that can employ thousands:
Farming and agro-processing
Tourism
Fisheries and value-addition
Light manufacturing
SME services and suppliers linked to big projects
Resource money should help these sectors grow — not destroy them through high local costs.
4. Invest in people, not only in big projects
Infrastructure is important, but skills are even more important.
Use resource income to:
Improve vocational and technical training
Support apprenticeships and youth programmes
Build entrepreneurship pathways
Train welders, engineers, digital creators, technicians
Strengthen community colleges and TVET centres
If Namibians lack skills, foreign workers will take the well-paid jobs — and we’ll watch our own wealth pass us by.
5. Fight corruption before it eats the future
Let’s be honest: corruption destroys resource wealth faster than anything else.
We need:
Transparent contracts
Public reporting of every payment
Real procurement oversight
Strong parliamentary scrutiny
Independent audits that are published
If we fail here, everything else collapses.
6. Spend wisely — not wildly
Resource income must never be used to inflate the government wage bill or make permanent promises we cannot afford.
Spend on things that last:
Roads and rail
Schools and teachers
Hospitals and clinics
Water systems and desalination
Electricity and ports
These are investments, not expenses.
A Simple Action Plan
0–12 months
Pass a firm, transparent Sovereign Wealth Fund law.
Publish the rules: what goes in, what comes out.
Tighten financial controls to reduce waste.
1–3 years
Build foreign reserves and invest resource flows abroad to ease pressure on the Namibia Dollar.
Strengthen TVET training and SME support.
Launch value-addition pilots in mining, agriculture and fisheries.
3–10 years
Stay disciplined with savings.
Grow export-ready industries.
Maintain strict transparency and public reporting.
Prepare for the day when oil or mineral revenue declines.
Final Word
Dutch disease is not a fate — it’s a warning.
Namibia has time to choose a better path.
We can be like Norway — steady, wealthy and prepared —
or like nations that got rich fast and poor twice as fast.
If we stay disciplined, transparent and strategic, our natural resources can lift every Namibian, not just a lucky few.
This is our chance. Let’s not waste it.
