The agricultural sector plays a pivotal role in Namibia’s economy, with key institutions such as the Agro Marketing and Trade Agency (AMTA), the Namibian Agronomic Board (NAB), and the Agricultural Business Development Agency (Agribusdev) playing crucial roles in its development.
This article advocates the merger of AMTA, NAB and Agribusdev into a single state-owned enterprise (SOE) to streamline operations, improve efficiency, and reduce government expenditure.
Mandates
Agribusdev was established in 2009 through the Agricultural Business Development Act, No. 5 of 2009 to oversee and manage the government’s green scheme projects aimed at increasing agricultural productivity through large-scale irrigation farming.
AMTA was established in 2012 through a Cabinet decision 7th/10.05.11/015, as a specialised agency of the Ministry of Agriculture, Water and Forestry responsible for the coordination, marketing and management of Fresh Produce Business Hubs and National Strategic Food Reserves (NSFR) facilities, to ensure food security.
AMTA focuses on facilitating and promoting agricultural marketing and trade in Namibia.
NAB was established in 1992 under the Agronomic Board Act, No. 32 of 1992. As a regulatory body, NAB promotes and regulates the agronomic industry.
Its primary functions include regulating the production and marketing of agronomic crops, promoting research and development in the agronomic sector, facilitating the implementation of policies to support agronomic crop production, and ensuring compliance with quality standards and market requirements.
Benefits
Integrating these entities would offer several significant benefits. Firstly, improved efficiency would result from eliminating redundancies and creating a more streamlined organisational structure.
A unified management team would oversee operations, ensuring better coordination and decision-making. Streamlined processes would minimise the duplication of roles and functions, leading to a more efficient use of resources and faster implementation of initiatives. Farmers and other stakeholders would benefit from a one-stop service centre, simplifying interactions and reducing the complexity of navigating multiple institutions.
Examples
Global examples illustrate the positive impacts of agricultural mergers on efficiency. For instance, Denmark’s formation of Arla Foods in 2000 through the merger of Swedish dairy cooperative Arla and Danish dairy cooperative MD Foods resulted in one of Europe’s largest dairy companies.
The merger led to increased operational efficiency through economies of scale, streamlined operations, and reduced production costs.
In Brazil, the 2009 merger of Perdigão and Sadia created BRF S.A., one of the world’s largest food companies. This merger optimized the supply chain and enhanced competitiveness in international markets.
Strategic focus
Cost-savings is another compelling reason for calling for a merger. Currently, the government allocates funds to each organisation separately, leading to higher administrative costs and fragmented resource allocation.
Consolidating these entities would lower overhead costs by reducing the need for multiple administrative offices, support staff, and operational resources. Funds previously spread across the entities could be concentrated on strategic initiatives, resulting in more impactful investments in the agricultural sector.
Examples of significant cost savings from mergers include China’s Cofco Corporation, which undertook several mergers and acquisitions to consolidate its position. These mergers allowed for optimized supply chains, reduced costs, and enhanced competitiveness.
Strategic
Streamlined strategic focus is another benefit of a merger. A single SOE with a comprehensive mandate would enable a more focused and strategic approach to agricultural development. This would lead to better policy implementation, as a unified mandate would ensure national agricultural policies are executed more coherently. Additionally, improved data collection and analysis would result from a centralized body, leading to more informed decision-making and policy adjustments.
Global examples highlight the effectiveness of strategic focus through mergers. In Brazil, the merger of Perdigão and Sadia under BRF S.A. allowed for a more focused strategy in the food processing industry, enabling the company to dominate both domestic and international markets.
Duplications
Finally, merging AMTA, NAB and Agribusdev would address the issue of duplication. The current overlap in mandates can lead to duplicated efforts and conflicting priorities. A unified entity would harmonise functions such as market regulation, promotion, and development, preventing resource wastage on redundant activities and providing clearer mandates. This would reduce confusion among stakeholders and improve accountability.
Examples of redundancy elimination through mergers include the consolidation of regional banks into the State Bank of India (SBI), which led to better resource allocation, improved customer service, and a stronger banking sector.
Feasibility
The proposed merger of AMTA, NAB and Agribusdev is not only feasible but also crucial for ensuring the long-term sustainability of Namibia’s agricultural sector. While the process would require careful planning, including aligning legal frameworks, managing human resources, and integrating operational systems, the benefits far outweigh the challenges.
Legal and structural alignment would involve harmonising existing legislative frameworks, while human resource considerations would require integrating staff from the three entities and aligning them with new organisational goals.
Operational integration would necessitate the alignment of financial management, procurement, and IT systems to ensure efficient operation from day one.
Opportunity
The proposed merger of AMTA, the NAB, and Agribusdev offers a strategic opportunity to enhance the efficiency, effectiveness, and sustainability of Namibia’s agricultural sector. By streamlining operations, reducing costs, and avoiding duplication, the new entity would be better positioned to support the country’s agricultural development goals, ultimately benefiting the nation.
The examples of successful agricultural mergers from around the world illustrate that this approach can lead to significant improvements in efficiency, productivity, and competitiveness.
Time is ripe for such a bold move, which would signal the government’s commitment to optimising resources and delivering value to the Namibian people.
As we consider the formation of this new state-owned enterprise, the AgriOne Namibia or AgroVision Namibia stand out as strong candidates to embody the vision of this unified approach as they reflect innovation, integrated, and future-oriented nature, highlighting commitment to driving agricultural growth and sustainability in Namibia.
*Lot Ndamanomhata is graduate of public management, journalism and communication.
This article reflects his views and writes entirely in his personal capacity. This is the abridged version.