Strong headwinds, mainly on account of another drought in two years, coupled with the outbreak of Foot and Mouth Disease, have resulted in the total loans approved by Agribank during the third quarter of this year increasing by 1,7% from N$143,9 million in the corresponding period of 2014 to N$146,3 million.
“The moderate growth in loans approved is mainly due to the effects of drought, as farmers are cautious to take up new debt,” says Leonard Iipumbu, the chief executive officer of Agribank in a report.
To date, loans approved to clients decreased by 26,8% from N$219,2 million in 2014/15 to N$160,5 million in the 2015/16 financial year.
“The decline in loans approved is mainly attributed to the drought situation and the Foot-and-Mouth Disease, reducing appetite for new loans. Due to the prevailing natural factors, farmers could not sell their livestock and this led to depressed meat prices,” he says.
The agricultural sector has been hit by drought and the Foot-and-Mouth Disease experienced north of the veterinary cordon fence.
The report says National Land Reform Programme farms purchased by previously disadvantaged Namibians decreased significantly in the third quarter by 51,6 % from N$62,2 million in 2014/15 to N$30,1 million in the 2015/16 financial year.
“The reduction in the acquisition of farmland is mostly due to escalating prices of land per hectare and uncertainty created by climate change,” says Iipumbu.
The bank approved a total of N$3 million under the Post Settlement Support Fund, benefiting 24 resettled farmers. This is compared to N$2,9 million approved in the 2014/15 financial year.
To date N$4,9 million was approved in the 2015/16 financial year, compared to N$6,3 million in 2014/15, benefiting 50 resettled farmers.
“The bank calls upon all clients whose loans were approved to come and take up their loans within six months after approval. Failure to do so will result in the loans being cancelled,” says Iipumbu.
Last week, Permanent Secretary of the Ministry of Agriculture, Water and Forestry Abraham Nehemia said that the country hopes Namibia will resume beef and cattle exports to neighbouring countries in January six months after the last cases of Foot and Mouth Disease in the north of the country were detected.
Foot-and-Mouth Disease was reported in Ohangwena, Oshikoto, Kavango West and Omusati regions. The first outbreak was reported in May.
Of the 42 roadblocks that were set up to enforce the movement restrictions of animals and animal products, only 26 will remain in place, Nehemia said.
The agricultural sector also registered strong growth of 9,6% in 2014, as the sector emerged from one of the worst droughts in 30 years.