Groundbreaking public-private partnership in silo construction

0
26

WINDHOEK – In an innovative and groundbreaking public private partnership initiative, the  Minister of Agriculture, Water and Forestry John Mutorwa approved a proposal from the Namibian Agronomic Board in which N$6 million from its Reserve Fund is earmarked for subsidising bank interest for millers constructing additional silos in the maize triangle or golden triangle (Otavi, Tsumeb and Grootfontein). The approach leverages and matches the private sector investment of N$6 million with the same amount from the Reserve Fund, effectively ensuring additional storage capacity through the N$12 million investment.

“This is a win-win situation for both the private and public sectors, because the subsidy encourages the private sector to thrive,” says Christof Brock, CEO of the Namibian Agronomic Board. Under the plan, an approved registered grain miller will own and manage the silo, repay the capital and only 25 percent of the interest of his loan, while the NAB will pay the remaining 75 percent over a 10-year period. The move is meant to alleviate a major risk, which is the lack of sufficient storage capacity during bumper crop years for farmers in the maize triangle. Funding for the scheme comes from the surplus of the 1.4 percent levy paid by registered producers and the 0.95 percent levy paid by millers of maize to the NAB. The surplus of the levy is placed in the Reserve Fund.

“Because the scheme will be financed from Reserve Funds, we needed the approval of the Hon Mutorwa, and we are grateful that he has not only approved this, but has encouraged the initiative,” according to Brock. The subsidy scheme is offered to millers, but is subject to preconditions which include being a registered miller with the NAB and the ability of a miller to raise the funds required to buy maize to fill the silo or proof that the purchase can be financed with silo certificates or letters of credit. The registered miller can also qualify for the subsidy if financing for the construction of the silo has been granted by a financial institution that is registered with the Namibia Financial Institutions Supervisory Authority (Namfisa) or the Bank of Namibia. The storage facility must be constructed in the maize triangle, even if the registered miller is not in the maize triangle and the miller must also be able to provide a list of producers who intend supplying to the facility during bumper crop years. Applications for the subsidy are open for a 6-month period          and will close in April 2014.

By Deon Shlechter

LEAVE A REPLY

Please enter your comment!
Please enter your name here