|The Courier N° 127 May - June 1991- Dossier 'New' ACP Export Products - Country Reports Cape Verde - Namibia (EC Courier, 1991, 104 p.)|
|Namibia: Meeting challenge of nationhood|
by Paul GOODISON
Namibia may be a dry country, but with its small population and huge land area, there is considerable scope for growth in the agriculture sector. High grade meat is already exported in considerable quantity and Namibia is well known in the quality clothing industry for its karakul pelts. Expanding agriculture, and in particular adding value to primary production through more local processing, offers a route to greater prosperity, particularly for the poorest sections of Namibian society who are mainly rural dwellers. In the three short articles which follow, Paul Goodison outlines the problems facing some of the countrys most important agricultural sectors and puts forward suggestions for overcoming them.
The final article in this series rooks at the related area of fishing, which has the potential to become Namibias single most important economic activity. Overfishing prior to independence reached such a scale that stocks were depleted almost to the point of extinction, hut as Mr Goodison explains, the new Namibian Government took immediate and firm action to prevent further degradation. Now it is looking to the future, in seeking to strike a balance between conservation and fisheries development.
In each of the areas discussed, the author looks at the EC-Namibia relationship and from the standpoint of a neutral observer, he suggests ways in which this might be developed.
In financial terms, the single most important agricultural product in Namibia is undoubtedly beef. As with most other primary sectors in the country, production is mainly for export, and it is not, therefore, surprising that the beef quota (for exports to the European Community) figured prominently in the negotiations leading to Namibias accession to the Lomonvention. The quota of 10 500 tonnes which was agreed, is already beginning to have an impact on the Namibian beef sector in a number of ways.
In the first instance, it has provided greater economic security for the local beef industry. At independence, 84% of Namibian commercial beef production was exported to South Africa. As a result of being granted access to the EC market under the beef protocol, a proportion of this is now being sent instead to Europe, reducing Namibias dependence on the single and highly cyclical market of its southern neighbour.
In addition, the opening of exports to Europe has greatly stimulated the level of domestic meat processing in Namibia. 54% of exports to South Africa were on the hoof whereas supplies for Europe have to be slaughtered and processed before shipment. Supplying some 10 500 tonnes of frozen de-boned beef to the EC market in 1991 will require the domestic slaughtering and processing of a further 70 000 cattle, with a value added for the domestic economy of some R20 million, and the creation of up to 1000 new formal sector jobs.
The beef quota thus provides not only greater economic security for the industry in Namibia, but also an important stimulus to the local economy in terms of job creation and higher added value.
Beyond this, the operation of the levy rebate under the Lomeef protocol brings substantial additional revenue to Namibia in comparison with what could be earned in alternative markets, notably South Africa. In current market conditions, with South African beef prices at a cyclical peak, this additionality is estimated at R3 million per 1000 tonnes. Under the probable market conditions in the coming years, the additionality could be as much as R6 million per 1000 tonnes.
Under previous Lomonventions, the additional benefit derived from the levy rebate has accrued to the ACP governments in the form of tax revenue. With LomV, however, the decision as to who benefits from the levy rebate will be made by the ACP government. In Namibia, the sole beef exporter is currently the principal beneficiary of the levy rebate although it is, in consultation with the Government, formulating programmes to spread the benefit to previously neglected communal areas. In time, however, the Government may decide to play a more active role in spreading the financial benefit of the levy rebate through the imposition of an export levy on beef destined for the EC market. If this were to be done, the extra revenue generated could be deployed in support of broader rural development, outwith the commercial operations currently envisaged by the sole exporter.
In the medium term, this may prove a more appropriate solution for many black, former communal area farmers operating south of the veterinary control fence. This fence, which is known as the red line, divides the northern, former communal areas, where lung sickness and foot and mouth disease are prevalent, from those areas previously reserved for white commercial farmers where the diseases have been eradicated
Under the previous administration, beef marketing was structured against these farmers interests and in favour of the established commercial farmers. Many communal area farmers south of the red line are aware that the EC beef quota will improve financial returns to beef producers and they are presently enquiring of the Government how they can benefit from this. As in other areas, the need to overcome the legacy of unequal opportunities established under South Africas occupation, poses a major challenge of which the Namibian Government is keenly aware.
North of the red line, the problems of former communal area cattle farmers are somewhat different. For beef produced in this area, the principal market is roadside butcheries. Some of the northern farmers would like to see measures taken to improve marketing opportunities, so that they can benefit from levels of remuneration similar to those enjoyed by the commercial producers in the south. There have been calls for the progressive removal of the veterinary control fence, as animal disease control programmes gain ground. Other farmers, who are profitably engaged in the cattle trade with southern Angola are fearful that this will lead to a complete ban on such cross-border commerce, with a new veterinary control fence being established on the border. Another problem in the north is that, given population pressures, existing cattle farming practices are leading to severe environmental degradation. If action is not taken in the short term to halt this process, irreparable damage could be done to the fragile ecology of northern Namibia.
It is this type of wider concern which suggests that greater governmental involvement is required in determining the utilisation of the additional financial benefits accruing to Namibia under the Lomeef protocol.
Beyond the immediate benefits arising from the granting of a realistic beef quota to Namibia, it could also, in the medium term, greatly stimulate the tanning and leather working industries. A number of tanneries and leather working enterprises already exist in the country. However, they are often working with outdated technology, and the Lomonvention could have an important role to play in stimulating joint ventures, thus allowing Namibia to build up, on the foundation of its own natural resources (in this case cattle), a thriving new industry.
During the negotiations for the accession of Namibia to the Lomonvention, the coverage of the existing STABEX commodities was extended to include the export of karakul skins. These are obtained from karakul sheep and are used for the manufacture of high fashion garments. The karakul sheep is ideally suited to the harsh environmental conditions which prevail in large parts of southern Namibia.
At present, price instability on the international markets is severely disrupting the karakul industry. Despite the fact that prices in Rand terms rose during the 1980s, Namibias export earnings from karakul in 1990 are only half the level of those achieved in 1980. Pelt production has dropped to 21% of the figure of ten years previously.
With a view to stabilising karakul farm incomes and restructuring the industry, the Namibian Government is presently seeking STABEX support for losses sustained in 1990. Assuming support can be secured, the Government is then looking to establish a comprehensive programme involving the expansion and, where appropriate, reintroduction of karakul farming into communal areas.
It is hoped that stimulating managed expansion now will place Namibia in a good position to capitalise on impending improvements in international fur prices arising from de-stocking in the mink industry.
In addition, through improving and expanding karakul production in previously neglected, communal farming areas, it is hoped that the programme will substantially increase farm incomes. This is particularly the case for the drier southern and north western regions. Improving the standard of pelt production in the communal areas to the average prevailing in the commercial sector would effectively double the income of communal area karakul farmers.
The expertise for implementing such a programme already exists in the former white administrations agricultural extension service. The problem is to establish an appropriate organisational framework to deliver extension services to communal area farmers in a way which engenders confidence and stimulates the necessary improvements. In the past, such schemes have been implemented in a manner which benefited less efficient commercial karakul farmers. These farmers sold their poorer stock at inflated prices to local government-run karakul improvement schemes which were intended to help communal area farmers.
This kind of problem - overcoming the legacy of the past - poses a major headache for the Namibian authorities. Often, those most in need of support and assistance are beyond the reach of-established organisational structures. Reforming these structures to meet the new policy agenda is now a major task.
Nevertheless, if the balance of karakul production can be shifted to communal area farmers, and the quality of production in these areas can be improved, a firm foundation will have been laid for the industry in Namibia.
As regards adding value through processing, a basis already exists in the form of a factory which produces processed skins and karakul garments. However, considerable scope exists for increasing the value added element. If only 10% of existing pelt production could be processed to the Nappa (tanned) stage, and a further 10% worked up into finished garments, the value of export earnings from karakul could be doubled under current market conditions. This would also generate more than 100 new jobs on the pelt processing side alone. Such a course of development is quite within the capacity of established Namibian enterprises. What is required to realise the potential is joint ventures with Europe-based companies to facilitate marketing. Here again, the Lomonvention could perform a useful function.
Expansion of karakul farming in communal areas would also create many new employment opportunities through the establishment of small-scale karakul woof weaveries. There are already eight such weaveries in operation, employing between 200 and 250 people, as well as an unknown number of cottage weaveries.
There remains, however, considerable scope for expansion in this area, particularly if local weaveries could be linked to a national and international marketing network.
There is potential for every farmer with a herd of 150 karakul sheep to produce sufficient wool to employ two full-time weavers, with a further two employed in supporting activities related to wool-preparation prior to weaving. If sufficient training could be given to ensure a high standard of design (a weaving school already exists in Karibib), and providing markets can be found, an income of some R10 000 could be generated for the weaver and assistant.
It is clear that the reintroduction of karakul farming in communal areas could initially generate hundreds of jobs in the weaving industry with perhaps thousands more being created in the longer term. For such a programme to succeed, however, considerable technical and managerial inputs will be required. Initial seed money is also needed to establish pilot schemes. Opportunities to help meet these requirements exist under the Lomonvention (notably STABEX) and European non-governmental development agencies should be able to play a part.
Given the enormous problems of employment creation facing Namibia, particularly in the rural areas, an integrated programme for the development of the karakul industry is more than merely desirable - it is, in fact, essential.
With independence, and the removal of the commercial constraints which existed during the South African occupation, the Namibian game meat industry looked forward to a period of expansion. In 1989, the last year before independence, Namibia exported more than R5.5 million of fresh game meat to the European Community market, principally the Federal Republic of Germany. Links with the neighbouring Botswanan industry were being developed and there was the prospect of higher returns for the higher quality Namibian meat which was finally being marketed under its own name. On the basis of fresh meat exports, plans were even being laid for the development of processed game meat exports to the EC. It was expected that this further processing would create additional employment and quadruple export earnings from the game sector within a few years.
By mid-July 1990, the position appeared very different. Traditionally, Namibian game meat exporters had enjoyed reasonable relations with their South African counterparts who had largely taken the lead in marketing game products internationally. With Namibian independence, however, the South African suppliers sought exclusive marketing deals with those European importers whom the Namibian industry had previously supplied. Overnight, Namibian exports were cut off from their traditional European markets. This sudden change of circumstances for the worse is illustrative of the difficulties which a range of Namibian products may face with independence.
The second principal factor adversely affecting the Namibian game industry was the economic changes taking place in Eastern Europe. The breakdown of state marketing arrangements in the former communist bloc has led to a free-for-all in the export of Eastern European game to the EC market. This is seriously depressing EC prices for game meat. Normally, this would not have been expected to have such a direct impact on the Namibian trade - Namibian game is significantly different from the European varieties and has better quality and taste. However, the inability of Namibian exporters to develop brand name marketing of their products has ensured that they have fallen victim to the more general vagaries of the game market. A lack of international marketing experience has left the Namibian industry ill-placed to respond to the adverse marketing conditions with which it is confronted. Thus a sector, which only very recently appeared highly promising, is now threatened with devastation. As with karakul, assistance is needed in this sector to develop international marketing expertise and to restore export growth potential.
The legacy of over-exploitation
Namibia has, potentially, one of the richest fishing grounds in the world. This is due to the particular climatic conditions at the coast, where the cold but nutrient-rich Benguela current flows. In the past, the fishing industry has been a major force in the economy.
In 1968, fish processing based on inshore fishing accounted for 15% of exports and 10% of GDP. However, as local scientists predicted, this level of exploitation of the sea proved unsustainable. Unfortunately, local efforts to limit the catch, in the face of predictions of impending collapse, commonly gave way to the short term commercial interests of South African fishing companies. This occurred to such an extent that by 1978, the pilchard stock, which had been the mainstay of the inshore fish-processing industry, was almost exhausted, the biomass amounting to less than 2% of the figure in 1968.
The collapse of the inshore fishing industry led to considerable job losses in Walvis Bay, where employment in the fishing industry is now only 20% of what it was in its heyday.
The experience of over-exploitation of the inshore fish stocks was in large part replicated offshore. When the international rules establishing an exclusive economic zone (EEZ) of 200 miles for coastal states, came into being under the UN Conference on the Law of the Sea, the Namibian fishing grounds became, in effect, one of the few remaining free fishing areas in the world. This curious legal situation stemmed from the fact that the international community did not recognise South African jurisdiction over Namibia, and South Africa, in any case, did not have an effective regulatory authority to prevent resource depletion.
The International Commission, South-East Atlantic Fisheries (ICSEAF) did attempt to control access to Namibian waters in the interests of long-term sustainability, but pressures from commercial operators invariably led to the setting of quotas at the highest level of the scientific recommendations put forward. The situation was exacerbated by the fact that ICSEAF had no independent means of monitoring compliance with the quotas. As a result, they were honoured more often in the breach than the observance. The result has been a progressive decline in fish stocks, with the offshore fleet taking only 20% of its 1972 peak. In Namibia, this sad state of affairs was seen to have arisen in large part because of the lack of national control over Namibias fishing grounds.
The current situation
With independence, the new Namibian Government resolved to take firm action to protect this potentially very valuable national resource. By the year of independence, the commercially high value hake stock was only at 20% of its 1969 biomass and no less than 82% of the hake being caught was less than one year old. This indicated a situation of crisis proportions, in which immediate drastic action was required to avert a terminal collapse. Accordingly, the Namibian Government requested all foreign fleets to cease their fishing activities off the Namibian coast pending the results of a comprehensive stock assessment, the approval of new fishing regulations and the declaration of a national fisheries policy.
Whilst this request was initially respected, within a few months of independence, Namibias 200 mile EEZ was regularly being violated by vessels engaged in illegal fishing activities. The extent of these activities was dramatically illustrated by the arrest of five Spanish boats for illegal fishing, in November 1990. The seizure of these vessels was widely regarded as being only the tip of the iceberg - they had been part of a fleet of more than 30 such boats.
As its action would suggest, the, Namibian Government has accorded top priority to conservation and stock recovery in the formulation of its national fisheries policy. In the longer term, it aims to facilitate the development of the Namibian fishing industry, maximising the local processing of fish caught in Namibian waters and developing an indigenous offshore fishing fleet and associated fisheries support services.
The initial moratorium on foreign fishing activities in the EEZ has gradually been replaced by a policy granting restricted access to foreign vessels for specified activities. Licences for horse mackerel have already been granted, since local concessionaires were unable to take up the full 1990 quota of 200 000 tonnes.
For European Community fishermen, the main interest is not in horse mackerel, but in hake. This stock is still severely depleted, however, and the 1991 total allowable catch (TAC) established by the Namibian Government is only 60000 t. In the allocation of hake fishing licences - as with horse mackerel - priority is being given to locally based concessionaires. The Namibian authorities estimate that these (some of which are joint ventures with EC fishing concerns) will be able to take X5% of the hake quota, with the surplus being opened up, on a licensed and carefully monitored basis, to foreign fleets.
In the short term, this leaves little scope for legal fishing activities by EC vessels in Namibias EEZ. The level of access granted to foreign boats in 1991, for the all-important hake fishing, represents less than 2% of what was sought by the various EC fishing fleets It is also barely 4.5% of the amount which the Fisheries Directorate-General of the European Commission initially felt would be a realistic compromise level for EC fleet access in 1991. The Commission, however, has shown a growing awareness of the Namibian Governments conservation policy and the need for stock recovery, in its approach to negotiating a fisheries agreement.
Prospects for EC-Namibia cooperation
Namibia can learn a lot from the ECs experience of fisheries conservation in the North Sea where, despite the introduction of various technical measures designed to promote fisheries conservation, a number of the major fish stocks have continued to decline. In addition, the Commissions recent talk of the need to find new association formulas in the fisheries sector, leading to die conclusion of second generation fisheries agree-holds out possibilities for the negotiation of mutually beneficial fisheries cooperation agreements, which take into account the long term developmental needs of the fisheries sector in ACP states. Given the state of Namibian fish stocks, however, any current fisheries agreement would need to take a longterm perspective.
From a Namibian point of view such an agreement would need to contribute materially and significantly to the wider development goals set for the fisheries industry. It would need to specify, in particular, measures to be taken to facilitate:
- the effective implementation of conservation and stock
- the development of domestic processing of fish caught in Namibian waters;
- training of Namibian fishermen;
- technical and scientific cooperation;
- the further development of an indigenous Namibian inshore fishing fleet;
- the establishment of an indigenous Namibian offshore fishing fleet;
- the establishment of fishing industry service facilities in Namibian ports.
From an EC perspective, any such agreement would ideally need to guarantee EC vessels a mutually agreed level of long-term fisheries access.
The present problem is that, given the TAC for hake, there is little scope for foreign fishing boats. This is likely to continue having serious repercussions for EC fishermen, particularly at the Spanish port of Vigo, where many vessels are laid up, because of both the Namibian moratorium and internal EC fisheries conservation measures.
The solution for the longer term is a framework fisheries agreement in which the EC agrees to help facilitate the attainment of Namibias own policy objectives, as outlined above, in return for access for EC fishing boats to a specific percentage of the unutilised fishing opportunities up to the ceiling of the TAC. Community vessels would thus have, over say a 10-year period, a guaranteed level of access. They, in turn, would have a direct interest in the successful implementation of conservation measures since, to the extent that these were successful, the TAC could be gradually increased and hence, the total volume of fish available for exploitation by EC fishermen would rise.
Such an agreement could fit in well with Namibias short term needs (support in conservation) and longer term goals (expansion and development of the Namibian fishing industry), as well as giving concrete form to the Commissions quest for new association formulas. If such a long term perspective is not taken, however, there would appear to be little scope for EC-Namibia fisheries cooperation in the immediate future.