Southern Africa expecting new refinery as Namibia, Botswana deepen energy cooperation

Business Insider

19-05-2025

Southern Africa is expecting a new refinery as a result of a joint collaboration between the governments of Namibia and Botswana, as they move to deepen cooperation in the energy sector with the construction of a new refinery.
Southern Africa is planning a joint oil refinery project initiated by Namibia and Botswana.
The collaboration aims to improve energy security and reduce import dependence.
The region's shift toward oil exploration reflects attempts to tap unutilized hydrocarbon reserves.
Botswana and Namibia are taking concrete steps toward greater regional energy integration, with discussions underway to establish a jointly-owned oil refinery.
The Namibian reports that this initiative, aimed at boosting energy security and reducing reliance on imports, was a key agenda item during Namibian President Netumbo Nandi-Ndaitwah's recent working visit to Gaborone, where she met with her Botswana counterpart, President Duma Boko.
If realized, the project could mark a significant shift in Southern Africa's energy landscape, signaling a move toward collaborative infrastructure development and economic self-reliance.
According to a statement issued by the office of the Namibian president, ' 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. '
Namibia, Botswana to reduce dependence on diamonds
Botswana and Namibia are key diamond producers in Africa and are actively pursuing strategies to reduce their economic dependence on diamonds, a sector that has historically underpinned their national revenues.
This shift is driven by declining global demand for natural diamonds, the rise of lab-grown alternatives, and the inherent risks of relying heavily on a single commodity.
' As diamond-producing countries, Nandi-Ndaitwah and Boko directed that sector officials in both countries needed to work together to maximise revenue and value from diamonds in both countries, ' the statement says.
Botswana and Namibia, long reliant on diamond exports, are facing mounting pressure to diversify as global demand declines.
In 2024, Botswana's Debswana cut production by 6 million carats, ending the year at 17.9 million, while Namibia's Debmarine plans a 5% reduction in 2025 after a 13% cut the year before.
With their economies exposed to market volatility, both nations are now prioritizing diversification and regional collaboration to ensure long-term stability.
Oil refining - Next revenue source
The joint collaboration between Botswana and Namibia to develop an oil refinery and possibly coordinate oil production efforts could significantly improve the region's energy landscape in several ways.
In 2023, Namibia imported $1.52 billion worth of refined petroleum, making it the country's top import and placing Namibia 92nd among global importers.
Key suppliers included India ($395M), the UAE ($284M), Saudi Arabia ($206M), Oman ($163M), and Malaysia ($108M), underscoring Namibia's reliance on foreign energy, particularly from Asia and the Middle East.
In 2023, Botswana imported $1.08 billion worth of refined petroleum, making it the country's top import and ranking it 105th globally among 226 importers.
The majority of these imports came from South Africa ($773M), followed by Namibia ($242M), Mozambique ($59.4M), the UAE ($1.98M), and India ($1.96M), highlighting Botswana's regional reliance on neighboring energy suppliers.
Oil drilling in Southern Africa is gradually gaining momentum as several countries in the region seek to tap into untapped hydrocarbon reserves to boost energy security and economic growth.
Nations like Namibia, Mozambique, and South Africa have shown increasing interest in exploring and developing oil and gas fields offshore and onshore.