The Agricultural Bank of Namibia (Agribank) specialises in financing the entire value chain from land acquisition, production inputs, harvesting, transportation, storage, processing and marketing of products at competitive interests. Is living-up to its mandate of empowering farmers to continuously preparing today for a prosperous Namibia tomorrow..
Overall Agribank has six branches around the country namely Katima Mulilo, Mariental which takes care of the Southern Regions, Rundu, Otjeroku (Otjiwarongo), Midland and Oshakati. Prime Focus interviewed the Oshakati branch manager, John Nekwaya, who is personally fascinated with farming and expressed his satisfaction with the level of progress Agribank has made in empowering communal farmers to create wealth.
To this end he says Agribank has made a significant impact in communal farming as it has enabled communal farmer to access loans which have in return helped farmers to produce surplus thus creating food security at household level. In the process they have also created employment, while the sale of surplus produce is helping them to generate income. It is a milestone considering that more than half of them are directly or indirectly dependent on agriculture for livelihood.
Nekwaya explained that some communal farmers have done so well that they have graduated into commercial farming by way of accessing loans for acquiring commercial farms through the Affirmative Action Loan Scheme (AALS).
Agribank offers a wide range of loans which cater for the unique needs of Commercial, Communal Farmers, Emerging Commercial and Resettled Farmers and Cooperatives to name but a few.
It is these loans which are enabling farmers to purchase farming implements to mechanise their production whether it is buying tractors, rippers, fertilisers, veterinary medicines, links, etc. Some farmers even buy hammer mills either for service or commercial milling while some move into value addition or agro-production.
The drilling of boreholes has had a huge impact on production. Some farmers are now able to buy animals for breeding purposes, especially for genetic material. As such, they buy bulls to improve the quality and weight of their breeds because the Nguni does not fetch enough income nowadays because poor nutrition.
In addition the National Agricultural Credit Program is enabling communal farmers to raise the quality of their livestock and improve crop yields from their respective fields. This is coming in handy by enabling farmers to buy medicines to treat their animals while improving the quality of their produce and purchasing quality mahangu seeds for better yields.
The footprint of the Oshakati branch is vast, as it covers Oshikoto, Ohangwena, Omusati, Oshana and part of Kunene regions. Reaching out to all these regions with only 12 employees seems like a mammoth task but a dedicated team staff members makes it possible.
According to Nekwaya, Agribank uses every available opportunity to reach out to farmers. These include, among others, the use of radio talk shows, the Farmers’ Day activities organised at either constituency or regional levels, trade fairs and the road shows.
However, Agribank does not work alone. It has crafted a good working relationship with its key stakeholders, such as the farmers’ union, the co-operatives and the farmers support programmes (FSP) like the Namibia National Farmers Union (NNFU), which is the umbrella body of communal farmers. It also works with the Ministry of Agriculture, Water and Forestry (MAWF), Ministry of Trade and Industry (MTI), Ministry of Lands and Resettlement (MLR) and all the regional councils.
But Nekwaya laments the lack of collateral as a major challenge holding back farmers from unleashing their full potential. Although the bank has favourable loan conditions, farmers still have to borrow against security issues.
The interest on the production loan, Nekwaya explains, is 4% and the term,- if it is livestock is -10 years, as the normal loan in communal areas for livestock and production is also 4% while that of the infrastructure is 8.5%.
“There are farmers in communal areas who have good farming ideas but cannot bring them to life for lack of access to collateral as they do not have title deeds. So it’s a challenge to the bank to have to come up with innovative ideas that would help such farmers,” he explains.
Government has thus come up with a State Guarantee Trust to help provide security to the co-operatives only. Through the co-operative arrangement, Agribank is taking a risk of 20% while the Government gives 80% guarantee. Unfortunately, he said the co-operative concept is a new idea to many as farmers still prefer to do their own thing. But Agribank is doing its part by encouraging them to form co-operatives to access the available funds.
As for those who have been resettled, we have a plan with the Ministry of Lands and Resettlement to provide production loans, which works on a 50/50% arrangement.
Nekwaya strongly believes a lot needs to be done to improve mahangu production a staple diet in northern Namibia, which is currently very low. This, he says, can be achieved through a well set-up mechanisation process; using improved seeds, as well as applying fertilisers to increase yields.
“Because it is labour intensive, we have to weed on time so that when it comes to harvesting, we store our mahangu correctly to avoid post-harvest losses. The mechanisation must be speeded up. That is why Government has availed some tractors to help communal farmers to plough their land on time,” he says.
His call upon farmers is that they should put more effort on value addition to their produce be it a small or big processing plant, instead of selling their raw material outside the country.
He further urges farmers to look for alternative markets to sell their products, as well as get their staff trained. Although controls are in place, Nekwaya laments irresponsible borrowing by some farmers who often end up using the money for other unintended purposes.
Agribank is currently doing all in its powers to help farmers take farming seriously to maximise their business potentials. The Farmers Support Program a project of the Government of Namibia technically and financially supported by the Federal Republic of Germany through the Deutsche Gesellshaft fur Internationale Zusammernarbeit (GIZ) GmbH and implemented and co-funded by Agribank is hard at work in enhancing the farmers’ competencies as well as helping farmers to improve their practices.
As far as alternative markets are concerned, Nekwaya is pleased to note, some innovative farmers pursue markets elsewhere, e.g. Angola, the DRC and Zambia, to beat the Red Line restrictions.
On the grim drought situation, his only advice to the farmers is to sell their animals whilst still in good condition so they can fetch good money. As soon as the situation calms down, they will be able to restock using the Government subsidies.
In conclusion, Nekwaya says, “Agribank is for farmers. They must approach our offices whenever they need further information. They need to make use of our products and services that are very accessible and affordable.” PF