It is estimated that 70% of the Namibian population depends on agriculture in terms of employment, income and food security. The value added to the sector in the third quarter (Q3) of 2022 was estimated to be N$3.2 billion in nominal terms, representing 6.4% of the GDP, according to the NSA.
The agriculture sector continued to be the lowest contributor to the country’s GDP among the major industries of the economy. The growth rate of the agriculture sector has declined to 1.6% during 2022.
The reasons for this decline are inadequate infrastructure, alternate employment opportunities in the industry or service sector, and an increase in the casualisation of employment in agriculture. Agriculture plays an important role in the process of economic development, and can contribute significantly to household food security. In order to improve the agricultural sector, the government provides more funding for agricultural tertiaries to carry out research on all areas of agricultural production. This will lead to more exports and an improvement in the competitiveness of Namibia’s agricultural production in international markets.
Agribank should also come up with a stable policy for loan disbursement to farmers at a reasonable interest payback. As we know that most of the people around the world often depend on agricultural production, and agricultural production feeds the world by youth farmworkers. So, we’ll need to set up a potential program for youth farming to guarantee the future.
Furthermore, let us also include payment for environmental services to youths engaged in sustainable agriculture in rural parts. Highlighting, encouraging and supporting youths and their roles of engagement in agriculture and a deterrent from unhealthy lifestyles of urban areas is one way to reverse rural-urban migration.
Therefore, visits, experience-sharing, learning from fields and exchanges is a must if we are to sustain the efforts at a global scale. The current strategies of government are ineffective. For economic growth, you ultimately need to get people working, but not just working, working in a useful way that not only produces useful things, but also is innovating and developing. You need to encourage the expansion of industry, but also encourage innovation to increase productivity.
Lack of technical skills and experience
In 2016, Namibia became the first and only African country eligible for beef exports to the United States. In recent years, the export of crops, vegetables, fruits and forestry products has grown by value, of which table grapes has been the largest contributor. The Ministry of Agriculture, Water and Forestry (MAWF) has initiatives like the Green Scheme and the National Horticulture Development Initiative (NHDI) aimed at increasing local agricultural production. The Green Scheme encourages the development of irrigated agronomic production with a target of reaching approximately 27 000 hectares. The government acknowledged that Green Schemes had not met many of its initial goals. Less than 9 000 hectares were under irrigation, and several of the Green Scheme projects struggled financially.
Furthermore, a lack of knowledge is holding many farmers back from investing in new agricultural technology. Strong communal affiliations, particularly in the form of ethnic belonging, imply that economic inequalities are intimately linked to collective identities. One crucial aspect, however, is that critics in Namibia believe that the budget shortfalls were a reflection of the lack of engagement and consultation with key stakeholders. Furthermore, the conventional measurement of growth in agriculture does not reflect changes in income, but changes in the physical volumes of output. This can create serious discontent among farmers since their income can actually decrease as a result of the lower prices, even when output increases. Recognising and correctly valuing the performance, critical importance and increasing role of agriculture in economic development have important implications for public sector budgetary allocations and actual expenditures in agriculture, which continue to be low and inadequate. Since the performance of agriculture has been measured using information about actual output and the sale of raw materials, the sector’s contribution to the country’s economic development is highly undervalued.
Moreover, it needs to be recognised that as Namibia moves from a stage of agriculture-based development, either the percentage share of primary agriculture or the percentage share of expanded agriculture to GDP will decrease significantly. This is because other sectors of the economy, especially the service sector, become much more dynamic, therefore growing faster, especially in countries entering higher stages of development. It does not mean, though, that the agriculture or agribusiness sectors become less important.
Moving forward
The National Development Plans (NDP’s and HPP’s) set out a broad vision of eliminating poverty and reducing inequality by 2030. We need to adopt new strategies aimed at sustainably increasing agricultural production. Meeting this challenge will require significant increases in investment, innovation and collaboration among all stakeholders. The World Economic Forum asserted that “agriculture serves as a platform to build collaboration among stakeholders to achieve a vision of agriculture as a driver of food security, environmental sustainability and economic opportunity. The governments, business, farmers and civil society organisations have embraced and begun to implement this vision at global, regional and country levels”.
Hence, to turn a profit in the agriculture sector requires expertise, access to markets, access to financing and in most cases economies of scale. According to Robert Matsila, the project manager of the agro-industries business unit, “the margins are generally low and shrinking for the larger commercial farmers, and in these situations it is even harder for smallholders.”
The Namibian government shall fast-track land reform, with the goal of ensuring that property is priced according to article 16 of the Namibian Constitution. The “willing seller, willing buyer” basis, which required both parties to enter into any deal voluntarily, has been cited as a key reason for the slow progress in land reform. We cannot talk about a betterment of GDP whilst inequity in land ownership and access that resulted from apartheid still needs to be addressed, and so far, the land reform programme has not substantially altered the agriculture sector.
Namibia needs to take an innovative approach in the agricultural sector to find solutions to challenges unique to the country on a sectoral level. Policymakers responsible for agriculture, financial and macroeconomic policies need to establish interactions with the leading sub-sector intermediaries.
This interaction helps establish and enhance knowledge bases in the agricultural sector regarding marketing, financing, risk management and technical expertise, all of which are critical elements in enabling agricultural finance.
This can be said to be Namibia’s position, and explains why the country’s agriculture contribution to GDP stands at 6.4% whilst it is Namibia’s biggest employer of labour.