Agriculture growth dwindles

Despite its central role in the economy – being the largest sector in terms of employment, agriculture endured a declining phase between 2015 to 2019 and, consequently, its share to the GDP dropped to 6.6%.

25 March 2021 | Agriculture

ELLANIE SMIT







WINDHOEK

Despite decades of public and private investment in agriculture, growth in the sector continues to dwindle.

Agribank said harsh climatic conditions remain a threat to the sector, with the country experiencing the longest stretch of below-average rainfall from 2013 to 2018.

The bank’s marketing and customer strategy executive manager Regan Mwazi said this negatively affected crops and livestock farming.

According to him, the livestock sector continues to battle disease outbreaks, while the Foot-and-Mouth disease in the northern communal areas presents a major challenge to an efficient livestock marketing landscape and adversely affects farmers’ income.

Largest employer

He said agriculture is the largest sector in terms of employment, accounting for 23% of the labour force in 2018, while it contributed an average of 8.5% to the country’s gross domestic product (GDP) from 1990 to 2019.

Despite its central role in the economy, the sector endured a declining phase between 2015 to 2019 and, consequently, its share to the GDP dropped to 6.6%, compared to the peak recorded between 2000 to 2004, according to Mwazi.

Meanwhile, significant strides have been made by government to support the agriculture sector through its development capital, he said.

“Through national budget allocations, government has spent about N$407 million between 1994/1995 to 1998/1999, while the five years between 2014/2015 and 2018 and 2019 have attracted development budget expenditure of N$1.3 billion.”

He said public investment in agriculture peaked in 2016/2017, reaching 22% of total development expenditure, before dropping to 15% and 18% in 2017/2018 and 2018/2019 respectively.



Escalating debt a concern

Mwazi said agriculture development budget expenditures have been largely marked by investment infrastructure for water supply, irrigation, animal health and disease control as well as market infrastructure.

Although government spending is necessary for growth, escalating debt has become a concern due to emerging and existing socio-economic challenges, he said.

“This suggests that development budget allocations to economic sectors such as agriculture are likely to witness a decline.” The bank said there is, therefore, a need to encourage and incentivise private sector investment to ensure sustainable sector growth.

Mwazi added that investments have made it possible for the expansion of land under irrigation by 4 348 hectares since independence.

Exponential growth has also been observed in the horticulture subsector, which grew in production to the current level of 47% of its national demand of vegetables.

In 2001, Namibia was producing only 5% of its vegetables.

Furthermore, the beef export markets expanded to China and the USA from the traditional markets of Norway and the United Kingdom, with an estimated export value of N$600 million during last year.

The grape industry has also shown notable growth since independence, with an estimated export value of N$850 million in the 2020/2021 financial year.

“The 2021/2022 budget gives hope for economic recovery and institutional and policy reform, which is expected to resuscitate for business confidence,” Mwazi said.

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