Northern beef now on southern plates

Ellanie Smit

WINDHOEK

Beef from the northern communal areas (NCAs) is currently being exported into several new African markets, while it is also available for consumption in three towns south of the veterinary cordon fence (VCF).

According to Meatco CEO Mwilima Mushokabanji, meat from the NCAs is exported to Ghana, Tanzania, the Democratic Republic of the Congo (DRC), South Africa and Angola, while discussions are at an advanced stage to also penetrate the Middle Eastern market.

A total of 131 tonnes of beef has been exported to Angola, 14 tonnes to Ghana, 7 130 tonnes to South Africa and 2.5 tonnes to the DRC.

He said meat from the NCAs has also been consumed in Windhoek, Swakopmund and Walvis Bay for the past five months, while previously not being available south of the VCF, also known as the red line.

Mushokabanji explained that the red line can serve as an enabler for agriculture, or it can hamper it.

Of the 2.5 million cattle in Namibia, 64% is found in the NCAs.

“So, you need to make sure that you commercialise agriculture in that part of the country. We cannot continue [the trend that] farmers from the NCAs have no access to markets.”

Within a day

He added that Meatco capitalised on the African Continental Free Trade Area (AfCFTA) and did market analysis and engagement.

“We realised that Ghana had a high population and better currency. They are importing beef from Europe. Why can’t they buy beef from Namibia?”

Mushokabanji said Angola spends US$9 billion importing beef from Europe every year.

“They are saying why should we be importing beef from Europe when we can actually buy beef from the Oshakati abattoir that is so close to Oshikango border and within a day, Angolans are consuming meat.”

Meatco has thus far paid about N$12 million to farmers in the NCAs, he said.

Price disparity

Meanwhile, the Rundu abattoir is nearing completion and is expected to be ready for use during the first quarter of next year. Approximately 800 000 cattle need to be mainstreamed into the Namibian economy through access to local, regional and international markets in Namibia south of the VCF, Africa, Middle East and East Asia.

Mushokabanji further said a challenge they are currently facing is the price disparity paid to producers south of the red line (N$61/kg) and those in the NCAs (N$36/kg).

“The quality of cattle is the same. So, therefore, we must develop more luxury markets for the NCAs, so that we can pay the farmers more.”

Debt reduction

Meatco has drastically reduced its debt by paying off N$94 million to Bank Windhoek and N$520 million to First National Bank (FNB) Namibia.

The company, however, still owes the Development Bank of Namibia (DBN) about N$4 million.

Reducing debts is one of the key strategies that have been critical in the past year and moving forward for the company, which Mushokabanji described as a source of sustainable competitive advantage for the meat industry.

According to him, these were historical debts which were taken out many years ago in 2011 and which resulted in banks not wanting to do business with Meatco.

“So, strategically, we said we needed to resolve this, to bring our debt-to-equity ratio and our current ratio to normal.

“If we can pay FNB an amount of N$520 million within a period of 24 months, why can we not pay DBN?”

He added that monthly salaries at the company were reduced from N$14 million in 2018 to N$11 million in 2022, and no increments were offered to senior and middle management for the last two years.

“That is N$40 million per year less than what was disbursed in 2018.”

Meatco’s total staff complement reduced from 975 in 2018 to 738 in 2022.