The Cabinet has approved the implementation of several short-, medium- and long-term interventions to turn around the fortunes of the troubled Meat Corporation of Namibia (Meatco).
This follows media reports on the problems the company is facing in paying cattle producers for livestock delivered to its abattoir.
The Namibian on Thursday reported that Meatco owed 245 commercial farmers about N$230 million.
This was apparently in breach of the 30-day payment period agreement between the parties.
This figure was confirmed by Namibia Agricultural Union president Thinus Pretorius, who said Meatco owed producers an estimated N$320 million (value-added tax included) by the end of September.
According to a statement issued on Friday by the Ministry of Finance and Public Enterprises, under which Meacto falls, one of the resolutions was to appoint an interim board of directors for Meatco to assist in the refinement and implementation of these strategies.
Ministry spokesperson Wilson Shikoto clarified that the 11-member interim board was appointed for six months, effective from 1 September to 28 February 2024, and is chaired by former Agribank chief executive Sakaria Nghikembua.
“The interim board is at an advanced stage of developing an operational turnaround strategy, which is expected to be finalised before the end of this calendar year,” the ministry said on Friday.
The statement said the government acknowledged the importance of Meatco’s stability and its significant contribution to the country’s economy.
“The ministry is therefore committed to supporting Meatco in overcoming its financial difficulties and ensuring that all outstanding amounts to cattle producers are settled in due course,” the statement said.
“The government noted the recent newspaper articles pertaining to the unpaid creditors of Meatco, in particular the producers. Resolving this is top of the priority list of the government and the interim board,” said the statement.
Producers who were owed amounts ranging from N$1,3 million to N$6 million told The Namibian Meatco was slaughtering their cattle and not paying them for this.
They called for a meeting with finance minister Iipumbu Shiimi and minister of agriculture, water and land reform Calle Schlettwein over the issue.
Some farmers said they had stopped delivering cattle to Meatco and were taking their cattle to auctions instead, where prices have drastically dropped because of oversupply and cash-flow constraints.
The statement further said the government and the Meatco interim board valued the crucial role producers play in sustaining Meatco’s operations and the whole beef value chain.
“In this context, the interim board already had extensive engagements with all relevant stakeholders, including all farmers’ unions …
“The government is dedicated to ensuring that Meatco meets its obligations to its creditors,” the statement said.
Meatco has blamed its predicament on the ongoing drought, with chief executive Mwilima Mushokabanji saying in a statement that throughput has remained a protracted challenge over the past three years – especially after the devastating drought in 2019/20.
“Equally so, the outbreak of the novel coronavirus in 2019 negatively influenced the demand of our premium products and market realisation,” he said.
“Meatco has continued to pay competitive prices significantly above the South African parity price for the bulk of Namibian slaughter-ready cattle.
“To this end, Meatco paid N$560 million (and N$492 million in 2022) to producers to protect primary livestock production,” said Mushokobanji.
– email: matthew@namibian.com.na
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