By Hilary Mare
THE Meat Board of Namibia has been embroiled in crisis talks with role players in the weaver calf industry to try and find solutions to the current industry situation which has seen the imposed Standard Operating Procedures by South African feedlot authorities leaving the industry tip-toeing at the edge of the abyss.
Essentially, the implementation of new conditions for export of livestock, especially weaner calves, to South Africa, started to have a dramatic impact on weaner prices and not a single calf could have been exported by producers to South Africa since 1 July 2016, a condition that has worried the meat industry regulators.
While weaner calf prices fluctuated around N$19,35/kg at the beginning of the year, the average weaner calf price in July 2016 was about N$16,49 and decreased even further during August 2016. Certain categories of cattle such as smaller calves and lean cows sell for very low prices, and the number of animals offered at auctions is at its lowest. The whole situation is worsened by the current drought in Namibia.
“A meeting between role players, producers, abattoirs and Feedmaster discussed short term solutions. One option is to request producers with available grazing to accommodate weaner calves or by getting rid of unproductive animals and/or using supplementary licks to grow out weaners for the period. Considering the current weaner price levels, growing weaners to slaughter oxen with supplementary licks can be profitable,” said the Meat Board. The South African Directorate of Animal Health announced new conditions/ requirements for the import of Livestock from Namibia to South Africa in their Government Gazette on June 10. These conditions, applied as from July 1, require extensive testing before any animals can be exported.
In the revised conditions, small stock must be moved into an isolation camp for the period of preparation for export. Secondly, individual identification of small stock is required by means of an ear tag with a unique number for each animal. As per agreement between the Directorate of Veterinary Services and the Meat Board of Namibia, these ear tags will be purchased and disseminated by the Meat Board. These specific ear tags will initially only be applicable to animals that will be exported. The small stock will thus have to receive these specific identification ear tags when they are moved into the isolation camp.
Further, a list of the ear tag numbers should accompany the animals to their end destination, small stock should come from a farm that is certified free from Brucella Mellitensis or each animal in the group that will be exported must be tested within 30 days before export, sheep rams for breeding purposes must be tested for Brucella Ovis within 30 days before export, sheep should be treated against sheep scab during the period of preparation for export, small stock should be treated against internal and external parasites 72 hours before export and loading of small stock for export may only be done under veterinary supervision.
As far as cattle is concerned cattle herds should be declared clinically free from Infectious Bovine Rhino- Tracheitis /Infectious Pustular Vulvo-vaginitis (IBR/IPV) and must be vaccinated against IBR more than 30 days, but not more than six months before export with an inactive/dead vaccine. Secondly, the entire cattle herd should test negative for Bovine Brucella and TB for 12 months prior to export while cattle should be kept in an isolation camp before export and a list of ear tags should accompany the cattle to the final destination. Further bulls for breeding purposes should be tested for Trichomonas and Vibriosis, anthrax vaccines should be up to date (applied within 12 months prior to export), cattle should be treated against internal and external parasites 72 hours before export and lastly the loading of cattle may only be done under veterinary supervision. Proof of all vaccinations and treatments is needed for the veterinary official in order to certify the export permit.
On the other hand, South Africa started with the registration of import facilities and issuing of import permits for the import of Namibian livestock. One permit, as announced in the South African government gazette, is applicable to export of animals from Namibia to any destination in SA and requires an extensive range of tests, while the latest permit, the so-called SOP (Standard Operating Procedures) permit is valid only for approved destinations and requires less tests.
Economy may breach 5% growth by 2018
By Hilary Mare
IN the latest sub Saharan Africa outlook – conducted by RMB Global Markets Research – Namene Kalili of FNB Namibia has tipped the economy to breach the five percent growth barrier by 2018.
In his assessment he alluded to the notion that economists expected a mild economic recovery in 2017 as the agricultural, mining and manufacturing sectors recover and investments into water and energy begin to pick up.
“Government investment into rail, road, energy and water infrastructure should contribute toward an improved economic performance from 2017 onwards. The economy should breach five percent growth by 2018,” he affirmed.
In relation to current GDP, Namene states, that the Namibian economy remains under pressure as low commodity prices along with adverse climatic conditions decelerate growth. Water-intensive sectors, such as beverage and meat processing, have begun to close production facilities in response to water restrictions. Headwinds are mounting across all sectors and growth is expected to decelerate to 3.1 percent in 2016.
Kalili explains: “The decline is most severe in the agricultural, mining and construction sectors. Water shortages are constraining growth in the former two sectors while the completion of several projects will see construction activity slow. Employees in most of these sectors stand to see income growth ease as wage inflation moderate, headline inflation rises and interest costs go up further. Along with a slowdown in credit demand, the outlook for household spending is therefore not rosy at all”.
Regarding inflation Kalili revealed that the annual inflation rate increased to 7.0 percent y/y in July as processed food and beverage prices rose unexpectedly. Food inflation increased by one percent m/m after sharp increases in dairy, sugary products, prepared foods, non-alcoholic beverages and prepared water. He added: “Further inflationary pressure stemmed from housing inflation after a recent spate of water, energy, and property tax adjustments. Rising utilities are likely to trigger second round inflation in the rental category. Being the largest single contributor to the inflation basket, housing and utilities inflation will keep overall inflation upwardly sticky for the next year.”
Vehicle inflation accelerated in line with new vehicle prices, while under recoveries across all regulated petroleum products triggered a 30 to 50 cent increase in domestic pump prices. “We maintain our inflation outlook at 7.0 percent by year end, moderating to 6.6 percent by the end 2017.”
When looking at the monetary policy, the report highlights the fact that although the Bank of Namibia expects inflation to trend above seven percent, and even after FX reserves contracted sharply, it kept interest rates unchanged at seven percent. The decision was necessitated by the weaker growth outlook with mounting downside risks. “The current account deficit has begun to widen as increased net Government payments and slower FDI inflows resulted in FX reserves having to finance the deficits. Therefore, reserves came under renewed pressure and have resultantly dropped to N$19 billion or 2.4 months’ import cover,” Kalili clarified.
Lastly it states in the report that – regrettably – the Government is in no position to implement countercyclical fiscal policy. Falling SACU revenues and a slowing economy have depressed Government tax revenue. Therefore, debt to GDP is estimated at 40 percent. This has increased the need to contain government expenditure even further — a challenge which is being tested by additional public teachers wage demands.
“As the Government scrambles to mothball non-essential development projects, we expect the country’s sovereign credit rating to come under, increasing pressure in the medium term, especially when taking into account the recent drop in FX reserves,” concludes Kalili.
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