With the agriculture sector central to the lives of the majority population in Namibia, the Ministry of Agriculture, Water and Land Reform are worried about the difficulties Covid-19 pandemic would bring to the already stretched sector.
The sector, directly or indirectly, supports over 70% of the country’s population.
However, in recent years it has been performing below expected levels caused by the severe drought and tough economic conditions.
“The coronavirus and its economic implications threaten to take out the bottom of our already fragile economy. Investments to improve the productivity of the agricultural sector may offer the best opportunity for survival. Food and prosperity are the two main objectives,” Agriculture, Water and Land Reform Minister, Calle Schlettwein, said.
Agricultural production, and subsequently household income, is low in the subsistence sector due to chronic drought and consequent water shortages resulting in death of animals 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.
The agricultural ministry is now fearing the worst after Namibia was put on lockdown – restricting the movements of goods and people due to the coronavirus worldwide outbreak.
With problems envisaged to affect food production and food supply, the Namibian government has chipped in with a R700 million package to help the agricultural sector.
The government will guarantee R500 million, concessional rate, a loan scheme for non-agricultural small businesses, with funds provided through the Development Bank of Namibia (DBN). The loans will be extended to businesses experiencing or expected to experience cash-flow pressure as a result of a loss in revenue due to Covid-19.
The government will further guarantee a R200 million loan scheme for farmers and agricultural businesses by extending a guarantee for such loans to the Agricultural Bank of Namibia. The loans will be extended to cash flow-constrained farmers and small to medium-sized farming businesses that have experienced a significant loss of revenue.
“Granting of the policy relief to borrowers by DBN and AgriBank in the form of a capital repayment moratorium where a holiday is allowed on the principal amount for a period ranging between six (6) months, but not exceeding two years (24 months) based on assessment, recapitalization of interest, lengthening of the repayment periods and waiving of penalty provisions,” Finance Minister Iipumbu Shiimi said on Wednesday at State House.
