JM Kretschmer

The local poultry industry is not one without a diverse range of challenges, the primary and most enduring one being imports and smuggling.

In 2019, it was reported that 4 816 tonnes of chicken, most likely destined for transit, remained in Namibia, illegally.

The presence of smuggled chicken in the retail market in the country is very costly – not only to the Southern African Customs Union (Sacu) and the Namibian Revenue Agency (NamRA), but also to the local economy.

The damage runs into hundreds of millions of dollars.

Informal calculations indicate that for an SME or informal trader, raising chickens and selling them after slaughter, creates 1.5 jobs for every 100 chickens sold.

Working on a rounded 5 000 tonnes, or 5 million kilogrammes, and at an average of 2kg per whole chicken sold, 2 500 000 chickens entered the country illegally in 2018. If 1.5 jobs are created per 100 chickens sold, Namibia lost, in its SME and informal sector, 37 500 jobs during 2018. Taken at a minimum wage of N$2 500 monthly, the total losses in income stand at N$93.75 million.

These challenges persist but have become more complex.

Delay in handover

On 13 January of this year, the Livestock and Livestock Products Board (LLPB) effectively took control of the poultry industry, including all imports, following the Government Gazette of 13 December 2024. The notice requires all imports into and exports from the country to have a permit from the LLPB. Following this, all producers of poultry products were given a deadline of 15 March 2025 to register with the LLPB.

According to Beata Xulu, the specialist of import commodities at the LLPB, “two steps are necessary to enable the actual transfer to avoid a vacuum. The first step is the establishment of measures by LLPB to sustain the import restriction policy intent. The second step is the repeal or withdrawal of existing measures by the Ministry of International Relations and Trade (MIRT). Xulu said for the first step, the LLPB’s board met on 26 and 27 June to discuss the Standard Operating Procedures (SOP), which will ensure the continued implementation of import restrictions and support to the local poultry industry.

Following this step, MIRT is expected to repeal Government Notice 54 of 28 February 2020, allowing the LLPB to take over. The board is mum on exactly what was discussed, but it appears the SOP has been given the go-ahead; whether it is as is or not is unknown.

While MIRT did not respond to questions sent, the process of withdrawal has not commenced.

Sources indicate that the process could take many months, and that the ministry first wants to conduct a study evaluating the LLPB’s SOP and its effectiveness.

To further compound the matter, the LLPB is also in the process of conducting a study, which is now at the tendering phase, to inform how best the industry must be managed. This, after the first amendments to the relevant legislation allowing the LLPB to retake control of poultry, was tabled a year ago.

Currently, the LLPB receives levies of hundreds of thousands of dollars monthly from the industry.

Consider local monthly production by Namibia Poultry Industries, Kadhila Poultry, and Roots of between 3 000 and 3 500 tonnes and the levies as follows: 0.7% of production cost as a general levy on products, a 0.2% classification fee, also based on production costs, 0.6% of the selling price of day-old chicks, and 0.6% of the selling price of hatchable eggs, the latter two if produced.

No protection

What is more, producers are unhappy.

According to Janneman Human, the manager of the abattoir at NPI: “These levies have a significant financial impact on our business. Unfortunately, we are not seeing the expected results of import controls for which these levies are intended.” Etuna Hango from Kadhila Poultry, which began operations in November 2024, pays around N$50 000 monthly to the LLPB without any of the expected controls and support. He further emphasised that illegal imports must be stopped because there is a material impact on the long-term sustainability of the poultry industry. It appears the status quo will continue, at least into the foreseeable future.

Anton Faul from the Agricultural Trade Forum is of the view that as it stands, the takeover will still benefit the current regime, but the ministry must fast-track its withdrawal.

Oversaturated market

Back in 2020, then trade minister Tjekero Tweya reduced import quotas from 1 500 to 1 200 tonnes monthly. That quota has been in place since, but two new players have entered the market: Kadhila Poultry, producing 400 tonnes a month, and Roots, which produces between 100 and 150 tonnes. In the meantime, NPI has also increased production. 

According to Faul, the new players did not fill a gap in the market. And then there is still the informal market, which, according to those in the know, is substantial.

The total local demand, however, is still unknown. The LLPB’s study will investigate that.

Faul, however, believes there is still a place for imports, in particular specific products such as crumbed chicken or, for example, wings. If that demand is filled with local production, the only solution is exports to the EU of the high-value products such as fillets.

Perspective

International trade expert at Namib Mills, Arwil Viviers, is of the view there are some concerns with the status of imports. The most recent complete figures are for 2023, and they indicate that 11 939 tonnes of mechanically deboned meat (MDM), which is not subject to quotas, entered the country, with just over 5 000 tonnes staying behind. Looking at the figures, 75% of the whole frozen chicken category comprises quota-free MDM. MDM is used in bologna and other highly processed products like nuggets. 

According to Viviers, it is difficult to quantify MDM demand in the country, but of the total imports of just under 9 700 tonnes in 2023, just over 5 000 tonnes were MDM, which is high for a market that has two processors of meat products.

Viviers questioned if reconciliations are taking place at bonded warehouses for transit products and asked how NamRA would reconcile temporary imports and re-exports, asking what the time frame is and how it correlates with bonded warehouse inspections.

According to Yarukeekuro Ndorokaze, NamRA’s chief of strategic communications, temporary import permits are granted for up to 180 days and can be extended, but importers are to provide guarantees equivalent to duties and taxes should the product be imported into Namibia, and these are refundable upon exportation. Warehoused goods are permitted for five years, and in terms of reconciliation of exports or imports into the country, NamRA uses the automated ASYCUDA World System that tracks temporarily imported goods or goods imported to Namibia.

NamRA controls import permits from the trade ministry to ensure they are not used more than once through physical inspections and, depending on the quantities, and if the products are in order, will endorse the permit as depleted, keeping it on record.

Regarding MDM, Ndorokaze said they have amplified inspections of MDM because this has been identified as an area of potential for smuggled goods, and “therefore NamRA is paying special attention to MDM imports.”

The fact remains that if all the MDM imported is in fact MDM, that leaves monthly imports of roughly 392 tonnes of chicken in 2023. Why then does NPI have current stockpiles of over 2 400 tonnes, and why can Kadila not increase its current production, as it intended?

According to Human, the stockpiles are due to poor sales, which in turn stem from the competition from cheaper, imported chicken.

Both Hango and Human lament the lack of quality control applied to imported chicken, while local producers must meet strict requirements. They also question why the industry is not subject to the regulations that govern agronomy — where local production must first be consumed before the borders are opened for imports. Both NPI and Kadila are keen to expand operations, but there is no policy certainty, and thus, they are hesitant.

Meanwhile, research performed by Cirrus shows that the poultry industry has a multiplier effect of four on the local economy, while Simonis Storm found that the industry requires better protection. Kadila Poultry employs 30 people directly and 370 indirectly, while NPI has a staff complement of 1 100. Roots has multiple producers at its facility near Stampriet.

Better controls

The LLPB has strengthened some controls at the borders. Xulu said measures have been implemented “that allow it to have a tight grip on cross-border trade of all controlled products, including poultry.” The board has tightened import and export requirements via the permit system, and all poultry and poultry product consignments imported into or exported from Namibia or bond or storage are required to have an LLPB permit irrespective of origin or destination.

“This allows the board to closely monitor what is imported or exported and to detect and deal with any illicit activities.” She added that prior to 13 January, import or export permits were not required for consignments imported into or exported from bond or storage, which created a door for illicit activities or illegal imports of such products. Plans are underway to improve efficiency further with the management of non-quota products like MDM.

“The board has been monitoring traffic or throughput and evaluating inspection and clearance processes and procedures at borders to determine border personnel and infrastructure needs, including technology, as well as identify necessary improvements. Meanwhile, MDM trucks or any other trucks or any importers suspected of being involved in illicit poultry trade activities are monitored, have an LLPB seal put at entry points, and they are tracked until off-loading points where inspection by LLPB inspectors takes place. In-transit consignments are sealed at the entry point and tracked to exit points where LLPB border officers inspect the seals to ensure there was no tampering, then release them to the final destination.”

The industry speaks with one voice. MIRT must act forthwith and repeal its control over the poultry industry’s quota system, handing it over to the LLPB.

Local production, job creation, especially in line with the current administration that focuses on agriculture as a creator of jobs, and the fact that poultry is currently the second largest contributor to the agri-sector, with production value reaching N$1.74 billion in 2024, representing a 13.47% increase from the N$1.5 billion recorded in 2023, should be the primary focus. 

*JM Kretschmer is a freelance journalist.