Assessment of Investment and Financial Flows to Address Climate Change –
Namibia
Agriculture Sectoral Assessment
Progress Report by Sectoral Team Leader:
Olimpio Nhuleipo (MET)
May 2010
Agriculture Working Group:
Olimpio Nhuleipo (MET), Uazamo Kaura (MET), Veikko Shigwedha (MET),
Pekeloye Malwa (MAWF), Aina-Maria Iteta (MAWF), Romie Nghiulikwa (UNDP),
John Ashipala (UNDP), Juliane Zeidler (IECN), Christerline Ndeleki (IECN), Linda
Uulenga (IECN) and John Ishila (IECN)
Development by
Ministry of Environment and Tourism – Namibia
Ministry of Agriculture, Water and Forestry – Namibia
United Nations Development Programme – Namibia
Integrated Environmental Consultants of Namibia
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Ministry of Environment and Tourism
Government of the Republic of Namibia
Assessing Investment & Financial Flows to Address Climate Change in Key Sectors
Historical IF, FF, and O&M data and Subsidies
Data Collection and Sources of data for IF, FF and O&M Agricultural sector
The public sector data on investments and financial flows to the Agriculture include Government
budgetary allocation to Agriculture, Aquaculture and forestry as well as data on both Bilateral and
multilateral development Assistance to the Agricultural sector. These data is obtained from the
Ministry of Agriculture, Water and Forestry’s budget documents, MWAF’s Strategic Plan and the
Medium Term Expenditure Framework, NDP3 and Vision 2030. The other data were collected from
the countries’ Agricultural boards namely the Meat Board of Namibia and the Agronomic Board of
Namibia. The Agricultural Boards provides research and technical assistance to the agriculture sector
through own projects and programs. These projects are mainly marketing and promotion of
agricultural produce as well as pricing. The Agricultural boards also administer the ministry of
Agriculture’s projects. This is also the same with the Agribank which receive funds from the Ministry
of Agriculture to funds certain agricultural schemes such as the green scheme. Most of the
Agricultural projects administered by the Meat Board and the Agronomic board of Namibia are
government (MAWF). These projects are either donor funded or government funded and the boards
administer the funds and the implementation of the projects. Some of the Meat Board and
Agronomic Board projects are co-funded by the Namibia government and its development partners
and the board implement or administer the funds and provide technical assistance to farmers, both
commercial and communal farmers. In light of climate change and its likely negative impacts on the
Agricultural sector, the Agricultural boards of Namibia require additional financial, human resources
as well as technical assistance as part of institutional capacity building to be able to assist the
agriculture sector to copy with the impacts of climate change.
The available data on households and corporation investments into the Agricultural sector is
obtained from the Agricultural Bank of Namibia (Agribank) and the Development of Namibia (DBN).
However, the larger portion of investment and financial flows data by households and corporation in
the agriculture sector is outstanding and most of the commercial bank had promised to forward the
data to the adaptation working group as soon as they finish compilation
The Agriculture sector’s GDP amounted to XXX in 2005. This indicates that the agricultural sector is
the biggest sector of the Namibian economy employing more than xx of the labor force and
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Ministry of Environment and Tourism
Government of the Republic of Namibia
Assessing Investment & Financial Flows to Address Climate Change in Key Sectors
supporting more than 80 percent of the Namibian population. Therefore, the Agricultural sectors
and the other related sub sectors such as forestry, aquaculture and water are the top priority of the
Namibian government and receive huge amount of budgetary allocations to achieve the main
national objectives and goals of food security and import substitutions. Due to aridity and variable
climatic conditions, the dual structure of the agricultural economy (commercial and communal
farming systems) and other systemic factors Namibia import more than 80% of its food staff from
South Africa and the country’s agricultural policy is to promote horticulture, crop and livestock
production to reduce reliance on import of food staff. To insert Data on livestock, crop productions?
Data on Investment in Agriculture by Banks, Households, other corporations
The Banking institutions, households, corporations, government budgets, bilateral and multilateral
foreign aid are the major sources of credit/loans and investments to/into Agriculture and other
related sectors. Namibia’s Banking sector consists of 7 major banks, three state banks and four
commercial banks. The state banks are the Agricultural Bank of Namibia (Agribank), The
Development Bank of Namibia (DBN) and the Bank of Namibia (BON) as well as the Development
Corporation of Namibia (NDC). These are the major government banking and lending institutions
established to serve as an engine of economic development and provide credit guarantee and loans
small, medium and large corporations. The Development Bank of Namibia funds industrial
development and focuses on value adding income generating activities and includes agribusiness
projects in its portfolios.
The Agricultural bank of Namibia is the country’s major agricultural bank, established in xx. It
replaced the Land Bank to serve as the engine of agricultural growth, thereby providing loans to
agricultural related economic activities, projects and programms. Agribank provides credit to
households, farmers and agricultural projects, programs and to all other agribusiness. The
agricultural bank provides loans to commercial and communal farmers as well as to various
agricultural related sectors. The four major commercial banks are the First National Bank of Namibia
(FNB), Bank Windhoek (BW), Ned Bank and Standard Bank. There are also small and medium lending
institutions providing credit to individual’s farmers, households and corporation’s s such as Eduloan
which provide loans for education and for purchases of livestock and agricultural implements. There
is also a great possibility that credit provided by cash loans is not only used for personal
consumption, but also for the investment in livestock’s and other agricultural tools. However the
data on credit extended to individuals, households and corporations by cash loans is hard to come
by, the same with the information on household equity and debt related to the Agricultural sector.
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Ministry of Environment and Tourism
Government of the Republic of Namibia
Assessing Investment & Financial Flows to Address Climate Change in Key Sectors
The main assumption is that there is great possibility that some of the credit extended to individual,
households and corporations by small and medium lending institution including cash loans is used
for substantive investments in agricultural income generating activities, mainly livestock purchases.
Assessment challenges
The Bank of Namibia is the legitimate sources of official data on investment, Foreign Direct
investment (FDI) to various sectors of the Namibia economy, but it does not have disaggregated data
on FDI to various sectors of the economy.
The challenge that the team faced of getting data on corporations and foreign direct investments to
the Agricultural sectors as most of the data available at the Bank of Namibia are in aggregate form,
indicating credit extended to the households, corporation as well as Foreign Direct Investment to all
sectors of the Namibian economy. The data obtained from the Bank of Namibia on credit extended
to the Agricultural sector from the domestics sources of funding is in aggregate form and does not
specify source of demand whether it was invested by households, corporations, FDI or by
government it is just a total figure of either loans to the Agricultural sector or capital formation or
investments in the agricultural sector without indicating the type of investing entities as per the
UNDP methodological requirements. The Bank of Namibia had total amount of credit extended to
individuals and corporations from domestic sources in the aggregate form and for all the sectors of
the economy, while the assessment specifically require the amount of investments by households
and corporations in the agricultural sector or at least the total amount of credit to the various
agricultural projects.
The fact that there is no disaggregated data on credit or loans and investments in the Agricultural
sector, prompted the Adaptation Working Group to directly procure data from state development
banks such as the Agricultural Bank of Namibia (AgriBANK) The Development Bank of Namibia (DBN),
commercial banks and other lending financial institutions. So far the team managed to collect the
data from only two Banks namely the Agricultural and the development Bank of Namibia.
Data on households debt and equity related to the Agricultural sector is very hard to come by, as
most of the
Namibian households
directly
involved in agricultural operate
in the
informal/subsistence farming sectors where records on investment and production are hardly kept.
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Ministry of Environment and Tourism
Government of the Republic of Namibia
Assessing Investment & Financial Flows to Address Climate Change in Key Sectors
As a result the adaptation working Group opted for the information contained in earlier assessment
reports on the socio-economic impact climate change on the livelihood of the Namibian population.
The historical data on IF, FF and O&M to/within the Agricultural sector, obtained from MAWF (the
sector ministry), and the Agricultural boards of Namibia are linked to Agricultural projects and
programs to be implemented during the NPD3 and the Vision2030 period. This programmatic and
investment financial information indicates the major sources which are government budgetary
allocation and Bilateral and Multilateral (ODA) to various agricultural related projects. See table from
Agriculture.
1) However we find it difficult to get data on subsidies and on O&M. On the other hand I find it hard
to understand the type of data required to populate the UNDP IF, FF, O&M tables. The historical data
required for table3 in the Methodology book, the question I have is: is this data for all the sectors of
the economy or data related to Agriculture sectors only? If this data is required for the Agricultural
sector only and not for other sectors of the economy to provide the bigger picture of the economy,
than I am a bit afraid because of the fact that most of the data on FDI, foreign borrowing (loans) and
Foreign Aid (ODA) to/by corporations are hard to grasp as I mentioned above that the Bank of
Namibia has aggregated data on investments by and on credit extended to households, corporation.
The figure available at the Bank of Namibia on ODA and FDI is for the whole economy not
disaggregated by sector. And Again the data on domestic investment in the Agricultural sector
contained in the Bank of Namibia’s Annual reports, their data base is an aggregate figure making it
hard for one to identify the portion of investment by households, investment by corporations ( equity
and debts) domestic sources.
On this one the option were are left with is to continue with our drive to get the outstanding data
from those commercial Banks which did not provide us with the data on the credit they extended to
the Agricultural related projects. Otherwise we won’t be able to have a picture of investment into
Agriculture by households and corporations as the Bank of Namibia has aggregate data. It is only the
commercial Banks to rescue us by providing us with the total amount of credit /loans they provided
to farmers, agribusiness and households and individual for agricultural related expenditures.
2) The other problem is the projections given the data gaps we have I think we really need help on
the projections and costing of the adaptation measures at least for one to make sure our projections
are right.
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Ministry of Environment and Tourism
Government of the Republic of Namibia
Assessing Investment & Financial Flows to Address Climate Change in Key Sectors
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Ministry of Environment and Tourism
Government of the Republic of Namibia
Assessing Investment & Financial Flows to Address Climate Change in Key Sectors