Revenue from oil exploration rental fees in Namibia has surged to N$37.93 million, significantly exceeding the budgeted N$10 million. This increase is attributed to licence holders renewing or extending contracts amid heightened exploration activity in the country. The Auditor-General's audit of the ministry of industries, mines and energy revealed this substantial rise in oil fees, highlighting a positive trend in Namibia's energy sector.
Namibia is intensifying efforts to convert its Orange Basin discoveries into production, with major operators accelerating their exploration programs. Companies such as Chevron, Rhino Resources, and TotalEnergies are actively involved in exploration activities across Namibia's Orange Basin. TotalEnergies is progressing its Venus development toward a final investment decision, indicating a growing interest in the region's energy potential.
The surge in oil exploration fees contrasts sharply with diamond royalty revenue, which fell N$629.99 million below the Ministry's estimate for the financial year ended 31 March 2025. The Ministry collected N$1.15 billion in diamond royalties against an estimated N$1.78 billion. This shortfall is attributed to reduced production by local diamond companies amid increased global competition from laboratory-grown diamonds.
The Auditor-General, Junias Etuna Kandjeke, issued a qualified audit opinion on the ministry's financial statements. The audit found that the ministry had N$31 million in outstanding commitments for accounts payable, indicating potential financial management challenges. Additionally, N$10.15 million was returned to the state treasury as under-expenditure, which the Auditor-General noted could have been used to settle a significant portion of the Ministry's outstanding debt.
The audit also identified discrepancies in vehicle expenditure and unrecovered debts. Although the ministry's accounting officer reported that no new vehicles had been acquired during the financial year, the general ledger reflected N$93,920.38 in vehicle-related expenditure. Furthermore, N$515,239.41 owed to the government by six current and former employees remained unrecovered, relating to salary advances, leave gratuities, and other employee-related transactions.
The Auditor-General flagged 26 state-owned immovable assets whose values were recorded as undetermined because they had not been included in the main government asset register. These properties include the ministry's head office and staff houses in Swakopmund, Oranjemund, Lüderitz, and Tsumeb. This finding highlights the need for improved asset management and registration within the ministry.
The audit report provides a comprehensive overview of the ministry's financial performance and highlights areas for improvement. The ministry's financial statements reflect both positive trends, such as the surge in oil exploration fees, and challenges, including the decline in diamond royalty revenue and outstanding commitments. The Auditor-General's findings will inform future financial management and strategic decisions within the ministry.
Key points
- Oil exploration rental fees in Namibia surged to N$37.93 million, almost four times the budgeted amount.
- Diamond royalty revenue fell N$629.99 million below the Ministry's estimate due to reduced production and global competition.
- The Auditor-General issued a qualified audit opinion due to outstanding commitments and unrecovered debts.
