By Kelvin Chiringa
Despite an eleventh hour attempt by Agribank to relieve drought stricken and heavily indebted commercial farmers by reducing their arears to 45% which would be paid in manageable amounts until September the 30th, the Previously Disadvantaged Namibian Commercial Farmers Union (PDNCFU) has criticized that this is still too harsh.
The union led by Jane Kuhanga has told this publication that the bank’s Chief Executive Officer, Sakaria Nghikembua ought to have reduced the amount to below the proposed 45%.
The bank’s position is that after payment of the 45% of the arrears, farmers would be removed from the blacklist while the remaining arrears would be capitalised.
The bank further explained that capitalisation of the remaining amounts will effectively mean that the farmers will no longer be in debt unless they fall in arears again.
Yet Kuhanga has rejected this.
Speaking to The Patriot, the union leader said the bank seems to be not acknowledging that the drought comes all the way from 2015 and as such farmers are under so much financial stress that they may fail to meet the demands of the amnesty.
“This does not fulfill the mandate of the bank neither the declaration that was issued by the President. All along now as farmers we are trying to seek audience with the bank which has felt that farmers that are in arrears should pay the 45%. It was a daunting task and we wanted to negotiate a lower percentage. Assuming you owe the bank and you are in arrears of between N$1 million to N$2 million or whatever, and now you have to pay 45%, but farmers have all along been having problems. The (drought) situation has been declared as much worse and again you say that for the installments you need to pay 60% so what it means is that there is no relief that is being granted,” she said.
She said that arrear payments under the said amnesty will be encumbered by the severe drop in livestock prices had, while most farmers were no longer selling.
The condition of the animals has also deteriorated way below market standards.
“Where will they get the money just to pay the instalment? There have been previous announcements made in 2015 and they are now also discussing and trying to see that this one of Sakaria’s is the worst case scenario. If you really put measures for people, why can’t you discuss with them?”
She said the union will not welcome the amnesty. “We are now in the process of trying to make a counter reaction to these measures that Agribank has given,” she said.
Another farmer who spoke on condition of anonymity said, “the bank’s leadership has once again demonstrated that it has distanced itself away from the farmers, who are their major stakeholder. There was no consultation whatsoever with the farmers in terms of their needs during this difficult drought. We as farmers from all the regions are thankful and are fully in support of our President and his vision and administration for being caring of the country and its people and having acted swiftly by declaring the drought an emergency. Drought doesn’t choose who to hit.”
What is the ideal relief measure?
Given that the drought-prone country has been suffering bouts of scarce rainfalls, Kuhanga said, “if the bank was really there for the people of the Republic, I could have said that they then ring-fence the arrears.
So you take the arrears apart and they do not collect interest and then the farmers will now have to agree maybe on the repayment period that is left and divide the arrears,” she said.
Kuhanga added that the bank should have entirely suspended the current loan repayments of this year.
This is a proposal that has already been officially shot down by the bank which has previously emphasised that it needed to grow its loan book by all means.
According to Kuhanga, the bank and the farmers should agree to a five to nine year repayment plan adding that recapitalisation was as good as adding more debt.
The bank has in the meantime stressed that farmers who are not in a position to meet the obligations as set out in the amnesty during this year, may have to approach their branches.
“The chief executive officer emphasised that no client should be turned away on the arrear and instalment payment relief option but that the client and the bank should engage where peculiar client circumstances exist.
For this reason the bank has set up a “war room” at its head office where branches can immediately refer issues or queries they cannot resolve,” said Agribank.