An Overview of Namibia's Agri Sector

In a recent report, the Namibia Agricultural Union outlined the state of that country’s agriculture sector, and how it has been affected by COVID-19 and other factors.

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In June of 2013, the year which saw the start of Namibia’s prolonged drought, the country’s agricultural debt stood at N$4,5 billion (about R4,5 billion). Exactly seven years later, this figure had soared to N$7,8 billion, an increase of 74%.

At the onset of the COVID-19 pandemic in 2020, the government implemented a number of interventions, including a reduction in the interest rate. This, in combination with good producer prices that year, left the interest payment as a percentage of gross income at 7,6%, which would have been ideal in a stable production system.

In the same year, Namibian farmers began to rebuild their herds after the drought, which had led to the deaths of almost half their total livestock. As a result, producers had fewer animals to market, and this, coupled with cyclical and long-term debt, negatively affected their ability to repay loans.

The arrival of the COVID-19 pandemic saw the government declare a state of emergency and impose numerous restrictions, but agriculture was largely spared these, being classified an essential service due to the role it played in the economy. Nonetheless, this did not prevent the pandemic from having a negative impact on the sector.

The international travel ban, for example, affected the transportation of pelts to auctions by air, which led to the cancellation of the country’s April 2020 auction.

The slowdown in economic activities put pressure on consumers’ income, changing their purchasing behaviour and reducing demand for protein, and hence red meat.