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In a bold move signaling a seismic shift in Southern Africa’s economic landscape, diamond-rich nations Botswana and Namibia are forging a powerful alliance to establish a jointly-owned oil refinery. The ambitious project, a key talking point during Namibian President Netumbo Nandi-Ndaitwah’s recent high-stakes summit with Botswana’s President Duma Boko in Gaborone, aims to bolster the two nations’ energy security and loosen the shackles of reliance on costly foreign oil imports.
The initiative arrives at a critical juncture for both countries, long accustomed to the dazzling, yet increasingly precarious, dominance of diamond exports in their national coffers. Faced with a double whammy of dwindling global demand for natural diamonds and the ascendance of their lab-grown counterparts, Gaborone and Windhoek are urgently seeking to diversify their economies and chart a course towards greater self-sufficiency.
“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,” declared a statement from the Namibian presidency, underscoring the high stakes and potential transformative impact of this collaboration.
For decades, Botswana and Namibia have glittered on the global stage as major diamond producers. However, the sparkle is undeniably fading. In 2024, Botswana’s diamond behemoth, Debswana, slashed production by a significant 6 million carats, ending the year at 17.9 million. Meanwhile, Namibia’s Debmarine is bracing for a 5% production cut in 2025, following a hefty 13% reduction the previous year. This stark reality of market volatility has ignited a fire under both governments to seek alternative revenue streams and fortify their economic foundations.
Beyond the refinery, the two leaders have also reportedly directed their respective mining officials to explore avenues for maximizing revenue and value extraction from their remaining diamond resources, hinting at a unified front in navigating the turbulent diamond market.
The proposed oil refinery represents a potentially game-changing development for the region’s energy dynamics. In 2023 alone, Namibia shelled out a staggering $1.52 billion on imported refined petroleum, making it their single largest import and positioning them as the 92nd largest importer globally. Their reliance on far-flung suppliers like India, the UAE, and Saudi Arabia highlights the vulnerability of their energy supply chain.
Botswana’s situation is similar, with $1.08 billion spent on imported refined petroleum in the same year, ranking them 105th globally. While a significant portion of their imports originates from neighboring South Africa, the need for greater energy independence is palpable.
The collaborative venture could not only slash these hefty import bills but also potentially position Botswana and Namibia as key players in the regional energy market, supplying refined petroleum products to neighboring countries. This ambition aligns with a broader trend of increasing oil exploration and production interest across Southern Africa, with nations like Namibia, Mozambique, and South Africa actively seeking to tap into their own hydrocarbon reserves. Namibia, in particular, has attracted significant international attention with promising offshore discoveries along its Atlantic coast.
While the specifics of the refinery project – including its location, capacity, and timeline – remain under wraps, the commitment from the highest levels of leadership in both nations signals a serious intent. If realized, this joint venture could mark a pivotal moment, transforming the energy landscape of Southern Africa and offering a tangible pathway for Botswana and Namibia to reduce their diamond dependence and secure a more prosperous and resilient future. The road ahead may be long, but the first steps towards a new era of collaborative energy independence have clearly been taken.
