Agriculture minister Calle Schlettwein yesterday took issue with the performance of struggling line state-owned enterprises (SOEs), arguing that their inefficiencies are placing an undue burden on farmers. 

He emphasised that these SOEs, which are intended to support agricultural productivity, are instead hindering growth and profitability for farmers. 

The minister noted that these industrialisation and marketing public entities were created with the correct intent to facilitate an economic transition
towards value chain development and industrialisation in the agricultural sector.

He specifically mentioned Meat Corporation of Namibia (Meatco), Agricultural Business Development Organisation of Namibia (Agribisdev), Agricultural Marketing and Trade Agency (AMTA), Agricultural Bank of Namibia (Agribank), and Namibia Industrial Development Agency (NIDA). 

“Unfortunately, without exception failing to deliver, the mentioned entities all had a mandate to support farmers and entrepreneurs, but unfortunately became a burden to them instead. Serious uncompetitiveness and mismanagement created financial constraints, which were all rolled onto the farming clientele. So, instead of supporting farmers, farmers supported ailing entities, farmers subsidised these entities, instead of the other way round,” said the agitated minister. 

Schlettwein was speaking at the 25th annual symposium organised by the Bank of Namibia (BoN) yesterday in the capital under the theme ‘Global Value Chains for Inclusive Development: How can Namibia Position its Agriculture Sector?’. 

The event brought together experts to explore strategies to unlock Namibia’s agricultural potential in global markets.

The minister also addressed the financial services’ sector, noting its risk-averse nature and the high costs associated with accessing credit and insurance. In this regard, he called for tailored financial products to cater specifically to the agricultural sector’s needs, as current offerings often leave farmers burdened with debt rather than providing meaningful support.

Schleittwein added that the Southern African Customs Union (Sacu) arrangement has long been a double-edged sword for Namibia, positioning the nation as a captive market for South African finished goods, while simultaneously stifling its ambitions for industrialisation. 

Currently, approximately 70% of consumables in Namibia are imported from South Africa, a statistic that underscores the heavy reliance on the country’s southern neighbour for essential products, including food and agricultural inputs. 

“This dependency not only limits local production capabilities, but also exacerbates challenges in the agricultural sector, where there is a noticeable deceleration in agro-processing activities,” he pointed out. 

Namibia’s agricultural sector, which contributes about 6% to gross domestic product (GDP), faces significant challenges, including climate change, high unemployment rates and persistent poverty. Despite these hurdles, the sector shows persistent resilience, maintaining a growth rate of 4.6% over recent years.  Setting the tone, BoN governor Johannes !Gawaxab said in Namibia where more than 70% of the population’s livelihood depends on agriculture, there is a need to make sweeping reforms to support growth in the agricultural sector. 

“Part of these reforms is empowering farmers through access to finance, and providing support through infrastructure development for storage, processing, quality testing and value-addition. Financial inclusion provides farmers with economic empowerment, enabling participation in the market, growing and upscaling their businesses, increasing income and savings, coping with emergencies, and meeting their obligations, both socially and economically,” said the governor.  

These translate into greater participation and contribution to the economy in terms of value addition, output/GDP, as well as reducing government’s social welfare support and fiscal burden. 

With increasing adverse climatic conditions, !Gawaxab called on the financial sector to support and buttress the agri-sector, including ensuring its reliance and the adoption of smart technology.

Emma Haiyambo, director of research and financial sector development at the central bank, presented some policy recommendations.

“Improving the ease of doing business, government needs to find a solution to the issue of high electricity costs. Improving rural infrastructure and supporting small-scale farmers, government needs to invest in rural infrastructure to make it easier for farmers, especially small-scale and subsistence farmers in rural areas to reach the markets,” she advised.

Haiyambo added that local government should also finalise long-standing bills and regulations to boost investor confidence. -mndjavera@nepc.com.na