Office-less Agribusdev in N$75m debt, salaries on govt
The state agriculture entity has vacated its rented offices due to non-payment, with 19 of its creditors threatening court action.
MATHIAS HAUFIKU
WINDHOEK
Top 5 creditors:
Agribank - N$19.4m
NamPower - N$15.2m
Kynoch - N$9m
NamWater - N$8.5m
PAYE - N$3.9m
Green scheme operator Agribusdev, which is knee-deep in N$75 million debt, has no office of its own and is getting its staff salaries from its line ministry, is a spectacular case of a failed public enterprise.
The entity is bleeding money, and made massive losses over recent years, with taxpayers having to fork out more than over N$50 million in bailouts and bank guarantees between 2017 and 2019.
The figures are contained in a Deloitte forensic probe into the business operations of Agribusdev.
As of 21 May 2021, 19 of Agribusdev’s 29 creditors threatened court action in a bid to recover what is due to them. So dire is the situation that the entity had to vacate its rented headquarters in Windhoek’s northern industrial area because it could not fulfil its rental obligations. Employees are now squatting in offices at the headquarters of the agriculture ministry.
The company also depends on its line ministry for payment of employees’ salaries.
Agribusdev’s fall from grace was triggered by a number of self-made problems, including political interference, poor leadership, insider trading, victimisation of employees and nepotism.
Its spectacular implosion has wreaked a lot of damage, particularly on government’s long-term dream to ensure that Namibia attains sustainable food security levels.
More than N$500 million in taxpayer money was spent on putting up agriculture infrastructure, operations and upgrading green schemes across the country.
On top of that, in 2019, the state-owned Agribank dished out a N$25 million loan Agribusdev can’t afford to pay back.
The audit team recommended for the realignment of Agribusdev’s business strategy and organisational direction.
The report also made recommendations that Agribusdev be moved from being a Section 21 Not-for-Profit company to a for-profit company.
Restructure
“It is apparent from our investigation that Agribusdev needs to re-strategise and restructure its business model to ensure self-sustenance in the long- to short-term. In addition to the strategic options, we propose an exhaustive internal strategy brainstorming exercise considering the different options available to the business,” the report read.
It further recommended: “Components of a public-private partnership model or joint ventures, which will involve the shareholder identifying a technical partner who will hold minority shareholding in each project while the ministry of public enterprises maintains the majority.”
It is also recommended that strategic alliances, which will involve developing alliances both domestically and internationally that can help penetrate these markets faster, should be pursued.
Another recommendation included: “Diversification of produce as there are lucrative markets for other produce which the company could look into producing, like fruit. There is sufficient capacity to support diversification at the projects with vast tracts of land remaining underutilised coupled by all green scheme irrigation projects having the best irrigation pumps in Namibia.”
Decline
The past five years, the report noted, have seen a decline in yields and income for all the farms controlled by Agribusdev due mainly to poor leadership and poor decision-making.
It said crops are planted at the wrong times, inputs are not available at the correct times and yields have dropped. This is the antithesis of the strategy outlined, it added.
WINDHOEK
Top 5 creditors:
Agribank - N$19.4m
NamPower - N$15.2m
Kynoch - N$9m
NamWater - N$8.5m
PAYE - N$3.9m
Green scheme operator Agribusdev, which is knee-deep in N$75 million debt, has no office of its own and is getting its staff salaries from its line ministry, is a spectacular case of a failed public enterprise.
The entity is bleeding money, and made massive losses over recent years, with taxpayers having to fork out more than over N$50 million in bailouts and bank guarantees between 2017 and 2019.
The figures are contained in a Deloitte forensic probe into the business operations of Agribusdev.
As of 21 May 2021, 19 of Agribusdev’s 29 creditors threatened court action in a bid to recover what is due to them. So dire is the situation that the entity had to vacate its rented headquarters in Windhoek’s northern industrial area because it could not fulfil its rental obligations. Employees are now squatting in offices at the headquarters of the agriculture ministry.
The company also depends on its line ministry for payment of employees’ salaries.
Agribusdev’s fall from grace was triggered by a number of self-made problems, including political interference, poor leadership, insider trading, victimisation of employees and nepotism.
Its spectacular implosion has wreaked a lot of damage, particularly on government’s long-term dream to ensure that Namibia attains sustainable food security levels.
More than N$500 million in taxpayer money was spent on putting up agriculture infrastructure, operations and upgrading green schemes across the country.
On top of that, in 2019, the state-owned Agribank dished out a N$25 million loan Agribusdev can’t afford to pay back.
The audit team recommended for the realignment of Agribusdev’s business strategy and organisational direction.
The report also made recommendations that Agribusdev be moved from being a Section 21 Not-for-Profit company to a for-profit company.
Restructure
“It is apparent from our investigation that Agribusdev needs to re-strategise and restructure its business model to ensure self-sustenance in the long- to short-term. In addition to the strategic options, we propose an exhaustive internal strategy brainstorming exercise considering the different options available to the business,” the report read.
It further recommended: “Components of a public-private partnership model or joint ventures, which will involve the shareholder identifying a technical partner who will hold minority shareholding in each project while the ministry of public enterprises maintains the majority.”
It is also recommended that strategic alliances, which will involve developing alliances both domestically and internationally that can help penetrate these markets faster, should be pursued.
Another recommendation included: “Diversification of produce as there are lucrative markets for other produce which the company could look into producing, like fruit. There is sufficient capacity to support diversification at the projects with vast tracts of land remaining underutilised coupled by all green scheme irrigation projects having the best irrigation pumps in Namibia.”
Decline
The past five years, the report noted, have seen a decline in yields and income for all the farms controlled by Agribusdev due mainly to poor leadership and poor decision-making.
It said crops are planted at the wrong times, inputs are not available at the correct times and yields have dropped. This is the antithesis of the strategy outlined, it added.
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