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Home / Steytler beefs up Meatco privatisation argument

Steytler beefs up Meatco privatisation argument

2023-02-22  Edward Mumbuu

Steytler beefs up Meatco privatisation argument

Erstwhile economic advisor to President Hage Geingob, John Steytler has entered the Meat Corporation of Namibia fray, saying the entity should have never been transformed into a full-blown parastal.

In an opinion piece, Steytler, an economist by training, said the now cash-strapped meat entity should have remained in private hands.

“If one is looking for a monstrous example of a public institute that should rather have been run privately, then one need to look no further than Meatco. Meatco has basically been running as a monopoly for its entire existence. Monopolies tend to exhibit a few things including profits and prices generally not reflective of the value of their output,” the highly respected economist asserted.

His remarks also come weeks after agriculture minister said Meatco was in the intensive care unit (ICU), with government having to decide whether or not to keep it on life support.

The country’s founding statistician general did not take Schlettwein’s comments lightly, suggesting the minister was diplomatic in his assessment.

“If you were to have done a quick Google search on the financial statements of Meatco over the last five years, you would probably wonder why it has not yet taken the road of Air Namibia.

“Between 2017 and 2021, Meatco recorded a loss year in, year out ranging between N$12 million and N$125 million, with an average of N$47 million a year,” Geingob’s former advisor said.

In fact, Steytler is perplexed by Meatco’s existence, as no business run on sound principles could survive under similar circumstances.

“If Meatco were any normal privately run operation, it would have been closed, faced bankruptcy suits, and the market would have replaced it with something more viable. Farmers already do not want to sell to Meatco and have already sought to establish their own meat-processing and marketing entity,” he said, seemingly referring to a rival private company – Savanna Beef Processors – which is all but certain to enter the beef terrain in the final quarter of 2024.

On the opposing end is another economist Omu Kakujaha-Matundu, who believes that any decision to recapitalise or liquidate Meatco should be informed by facts, not fiction. 

The Meatco question, he said, is of economic and national interest. 

“But with the information at hand, it is difficult to arrive at an answer, whether to keep or to let go of Meatco. We need a thorough assessment of short-term and long-term economic and financial benefits pre-government involvement (farmers’ cooperative era) and post-cooperative era (SOE/current) at national level,” Kakujaha-Matundu said. 

Actual information on benefits accrued to white commercial farmers, farmers north of the red line and communal farmers south of the veterinary cordon fence in the current set-up of Meatco must also be laid bare, he said. 

“These estimates derived from serious cost-benefit analysis, and not emotions should be presented to Cabinet and then parliament to make an informed decision whether taxpayers’ money should be used to resuscitate Meatco,” he suggested.  

Politicians have also jumped on the Meatco bandwagon, saying they are prepared to grab land if Meatco is liquidated. 

Their argument is premised on assertions that there is a deliberate agenda to collapse certain strategic SOEs, such as Air Namibia, TransNamib and now Meatco, to advance private interests. 

Kukajaha-Matundu, however, refused to be drawn into the political theatre. 

Instead, he said: “The government should not just jump at closing a national meat corporation which could hold long-term economic benefits for the whole nation, rather than the pursuit of narrow financial interest which serves only the few.”

The government, he continued, must wake up from its slumber. 

“Leaders should get serious with national projects. This is hard earned taxpayers’ money that they are wasting,” he said. 

 

Beef

Steytler’s remarks, contained in an opinion piece that appeared in the Namibian Sun last week, came a few days after New Era reported on a group of commercial beef producers’ – mainly white commercial farmers – demands that government immediately stops meddling in the affairs of Meatco.

They want the entity returned into the hands of commercial farmers.

Meatco is an entity between a rock and a hard place as it also faces an inalienable request to completely close down its operations in northern Namibia.

According to impeccable sources, white farmers south of the red line are of the view that their profit is being used to keep Meatco’s operations in the Northern Communal Areas (NCAs) afloat.

Some farmers want Meatco to have two separate entities, one for farmers south of the red line and another for those north of it.

 

Unmoved

In the midst of the brouhaha around the corporation’s survival, Meatco CEO Mwilima Mushokabanji has largely remained unmoved, maintaining their revival strategy is on the right track.

Another strategy was developed to allow meat from the north to be consumed south of the red line, with the assistance of the directorate of veterinary services in the agriculture ministry.

Meatco is also finalising the process to start exporting beef to the Middle East.

 

Politics

Meanwhile, Swapo Youth League Secretary Ephraim Nekongo, holds the view that Meatco is deliberately being sabotaged, to advance private interests.

“The downfall of Meatco is being orchestrated. They are deliberately starving Meatco, and now there are no cattle to slaughter… These people think we are stupid. We are going to lose respect, and forcefully demand for our land. We are warning them not to disrupt the peace. We have been patient enough, and one day we will get tired,” Nekongo was quoted as threatening.

- emumbuu@nepc.com.na


2023-02-22  Edward Mumbuu

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