Lukas Kumonika
Namibia continues to mainly export primary commodities compared to processed goods, particularly in the sector of agriculture, forestry and fishing. The sector is challenged with lack of value addition just as the mining sector. Seemingly, the value chain has stagnated at the farming stage (crop growing and animal raising with a little or no progression to the stage of processing.
Namibia Statistics Agency’s agriculture bulletin reveals that net export of live animals ranging between N$338.2 million and N$515.5 million between quarter one of 2021 to the same quarter of 2022. On the contrary, a smaller surplus was observed at a quite advanced stage of the value chain (meat and meat products).
Generally, a trade surplus is preferred over a deficit. However, there are opportunity costs associated with exports of unprocessed good. For instance, when animals are exported on hoofs, employment creation at slaughterhouses is compromised. Therefore, additional earnings from export of live animals comes at the expense of jobs that are potentially created at abattoirs.
Moreover, exporting live animals implies that potential output is not realised. Obviously, processed goods generate more income than unprocessed ones. In essence, although earnings are generated from exports of live animals, more could be earned at an advanced stage of the value chain (e.g., processing). This eventually translates to lower aggregate GDP.
Equally important, supplying live animals in the international markets could possibly lead to a low supply for animal by/co-products such as fats, skins and animal in domestic and external markets.
Besides contributing to GDP, animal by/co-products serve as sources of income for less economically privileged households who purchase them from local butcheries for resale and own consumption. To be specific, animal organs such as lungs, livers and kidneys, heads and feet and tripe “matangara” are resold in the informal markets as “kapana” to make ends meet. All in all, benefits derived from by/co-products are opportunity costs of exporting live animals.
In the final analysis, more initiatives should be implemented to ensure value addition and optimization of benefits in the livestock sub-sector. The sub-sector is faced with the challenge of high input costs accompanied by price instability. The public-private partnership is required to supplement the current interventions by the Ministry of Agriculture, Water and Land Reform, Agribank, Meat Board of Namibia, Meatco and NGOs to support agro-processing enterprises.