AfDB gives Namibia’s agriculture sector massive financial boost

By Timo Shihepo

Windhoek – The cash-strapped and drought-stricken Namibian agricultural sector is set to breathe a sigh of relief after the African Development Bank (AfDB) approved Namibia’s loan application to finance the country’s Agricultural Mechanisation and Seed Improvement Project (NAMSIP).

Information contained in the agreement and seen by The Southern Times shows that the AfDB will extend a R1 billion loan to the project, the Namibian government will contribute R362,1 million while the beneficiaries will contribute R56,8 million.

The agricultural sector remains central to the lives of the majority of the country’s 2.32 million population.

The sector, directly or indirectly, supports over 70 percent of the country’s population.

The sector has, however, in recent years been performing below expected levels due to prolonged drought and tough economic conditions.

Agricultural production, and subsequently household income, is low in the subsistence sector due to chronic drought and consequent water shortages resulting in the decimation of livestock herds and crop failures, widespread soil erosion and land degradation.

These problems also led to the lack of agricultural land and isolation from markets, high cost of agricultural inputs, lack of access to credit and limited income generating opportunities. However, through NAMSIP, the Ministry of Agriculture, Water and Forestry intends to improve household food security and nutrition, job creation, household incomes and lives of rural people through increased agricultural production and productivity.

Although government had already committed 25.5 percent of the funds, the agriculture ministry was, however, struggling to secure the remaining funds. The R1 billion loan, which represents 70.5 percent of the entire project, is definitely a timely boost. The funds were approved by the AfDB board on Monday, 4 December, in Abidjan and are expected to directly benefit 294,500 crop farmers and 10,000 livestock farmers.

Of these 10,000 framers, 2,500 are expected to be women.

“The Ministry of Agriculture, Water and Forestry is quite excited that our discussions with the AfDB have brought us thus far. It’s a welcome support, which will undoubtedly back our agricultural sector,” agriculture minister, John Mutorwa told The Southern Times.

In addition, the project would fully support 111 smallholder farmer cooperatives, and indirectly benefit about 800,000 people along the cereal crops and livestock value chains.

The proposed areas of intervention in the NAMSIP Project, namely agricultural mechanisation and seed systems development, will help increase agricultural production and productivity including market access.

Mechanisation enables producers to complete farming operations in a timely manner and also helps in increasing productivity and reducing cost of cultivation, especially in rain-fed farming systems.

The support to the certified seed system development will help to address the challenges on availability of high quality seed, especially under the dry land crop production programme, which will lead to increased nutrient dense crop productivity.

The project is expected to be implemented by Namibia’s Ministry of Agriculture, Water and Forestry together with partners over a period of five years, in all 14 administrative regions of Namibia.

The seed system development, however, will only be implemented in Kavango East and West, Oshana, Omusati, Oshikoto and Zambezi regions.

“The seed system, unlike the mechanisation, will only be implemented in those regions because we are targeting (areas with) maximum rainfall and areas where there are green schemes already,” ministry of agriculture permanent secretary, Percy Msika told The Southern Times.

Msika added that they expect to start implementation in the next financial year but were unsure when the money would become available.

“The Ministry of Finance will have to sit with AfDB to agree when the first tranche of funds would be released. I can also not tell you how the loan will be repaid because that’s the prerogative of the finance ministry.”

In a statement, the AfDB said the NAMSIP project is aligned to the bank’s High-5 priorities of Feed Africa, and improve the quality of life for the people of Africa.

The project’s two key components comprise value chain improvement, (with agricultural mechanisation and certified seed systems as sub-components), and institutional support through capacity building, and project management.

The project is also in line with Namibia’s Fifth National Development Plan 2017/2018-2021/2022); Harambee Prosperity Plan (2016/2017-2019/2020), and  Growth at Home Strategy for Industrialization, which identify agriculture as a priority area with enormous potential to contribute to economic progression, social transformation and environmental sustainability.

In the long run, the NAMSIP aims to enhance agricultural productivity in order to reduce annual importation of staple cereal crops/grains, facilitate job creation, and enhance household incomes, which will improve the lives of rural people.

Namibia’s agricultural sector can be divided into two distinct sub-sectors the capital intensive sub sector and the subsistence-based, high-labour, low-technology communal sub-sector.

The capital intensive is relatively well developed and export oriented commercial sub-sector, which covers about 44 percent of the country’s 824,268 square kilometres total land area, though it accommodates only 10 percent of the population.

The subsistence-based, high-labour, low-technology communal sub-sector covers 41 percent of the total land area and accommodates about 60 percent of the population.

Behind the R1.42 billion package

l Total cost of the project: R1.42 billion

l AfDB to give R1 billion

l Govt to contribute R362.1 million

l Beneficiaries expected to contribute R56,8 million

Out of the R1.42 billion

l R780 million is for general mechanisation

l R210 for seed system improvement

l R70 million for capacity building

l R360 million for project monitor and evaluation

Timeline of the application

l January/February 2017 the ministry of agriculture through the finance ministry applies for a loan from AfDB

l The AfDB appraised the ministry of agriculture’s application on the 14 July 2017

l Approved and announcement made on 5 December 2017.

l AfDB expects implementation to start in January 2018

l Government estimates the implementation to start in the next financial year 1 April 2018

l Total implementation expected to be in 2022

Who will benefit?

l General mechanisation to benefit all 14 regions.

l Seed system development is only for Kavango East and West, Oshana, Omusati, Oshikoto and Zambezi regions.

l Under agricultural mechanisation, estimated 31,000 females and 27,388 males will benefit directly.

Expected jobs

l About 100,000 jobs to be created of which 40,000 are for women

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