By: Nghiinomenwa-vali Erastus
Beyond the agricultural sector, the two Kavango regions have been cited for having massive economic potential, especially food security.
Despite this lauded potential, the two regions host most of the green schemes (seven of them), with many underproducing or nothing.
End of last month, the central bank governor, Johanness !Gawaxab visited the eastern region for a public lecture at Rundu, where he highlighted the potential of the two regions again.
He said the two Kavango regions have the potential to contribute to solving national economic problems due to their fertile land, immense supply of water, and favourable climate conditions.
!Gawaxab explained the regions’ abundant natural resources could play a key role in insulating the country against external shocks such as food prices.
The food price inflation was observed to increase faster than other commodities in the consumer basket.
“The Kavango East and Kavango West regions have the highest agricultural potential, which can significantly contribute to food security and diverse exports,” he explained.
!Gawaxab said that given the current situation, the private sector has a great chance to step up and serve as the engine of growth because the government can no longer do so.
He, however, highlighted that “to maintain a competitive economy moving forward, other crucial changes include breaking up monopolies in significant economic sectors and advancing the SOE’s reform agenda”.
The 2022 first quarter Agricultural Bulletin reveals that agriculture commodities brought income of N$564.8 million.
At the same time, the country has spent close to a billion ( N$839.6 million ) on agriculture commodities during the first quarter of 2022.
In terms of contribution, the agriculture (crop and livestock) subsector contribution stands at 4.2 per cent of GDP.
The Bulletin has also indicated that Namibia’s agricultural trade deficit maintains the country vulnerable to global food price developments and exchange rate risks.
The vulnerability exists despite the potential of the two Okavango regions and 11 green schemes.
The country’s vulnerability to food prices also heightened fertilizer imports as it imports most of its worldwide.
During the first quarter of 2022, Namibia imported 11 383 750 kg of ‘fertilizer and pesticide’ from Russia at the cost of N$160.0 million, compared to 1 308 910 kg imported at the expense of N$6.4 million in Q1 of 2021.
This translated into a hike in the average price of imported ‘fertilizer and pesticides’ from N$4.9 per kg to N$14.1 per kg imported from Russia.
The increase in import prices for ‘fertilizer and pesticide’ does have an impact on future harvests and on food security, the Bulletin highlighted.
The country leaders, however, continue to praise the two regions’ agricultural potential while most of the green schemes (from the 7) in the areas underproduce.
!Gawaxab, the public lecture at Rundu, aimed to provide a basic understanding of current economic shocks, their origins, and how Namibia, as a small open economy, can insulate itself from mounting externally driven shocks and pressures.
The country’s weak food production has also exposed it to imported inflation as it relies on other nations, mainly South Africa, for food supply.
According to !Gawaxab presentation, “the current inflationary pressures in the economy are imported and primarily the result of supply-side factors”.
This indicates that the high prices felt by consumers are not induced by high demand locally or too much money chasing a few goods, but prices are increasing from where the country imports its goods.
The constraints imposed by the Russia Ukraine war exacerbated commodity shortages such as wheat and cooking oil.
Despite the massive potential of the agricultural sector and the Kavango regions, the governor pointed out, the various shocks were a direct result of external factors beyond the control of any authority.
The seven green schemes in the two regions are Sikondo, Uvhungu Vhungu, Ndonga Linen, Shadikongoro, Musese, Mashare, and Shitemo.
Email: erastus@thevillager.com.na
