NAMIBIA AGRICULTURAL MECHANISATION AND SEED IMPROVEMENT PROJECT (NAMSIP)
- Reference: P-NA-AA0-005
- Appraisal Date: 14/07/2017
- Board Presentation: 06/12/2017
- Status: LendingLEND
- Implementing Agency: MIN AGRICULTURE,WATER, FORESTRY
- Location: Nation-wide (All Regions)
The Project has 2 components, namely: (a) Component 1 - Value Chain Improvement, with 2 sub-components,
(i) Agricultural Mechanisation and
(ii) Certified Seed Systems Improvement; and (b) Component 2 - Institutional Support, with 2 sub-components,
(i) Capacity Building, and
(ii) Project Management, Monitoring and Evaluation. The major activities under each subcomponent are as follows:
Sub-component 1.1: Agricultural Mechanisation (ZAR 0.78 billion, 55.3%):
(i) Support 111 farmer-cooperatives (total membership 10,681, including 6,912 women) with assorted agricultural production, harvesting and processing machinery and equipment;
(ii) Procure assorted crop production, harvesting and processing machinery and equipment;
(iii) Procure assorted livestock production (animal health, livestock feed and traceability) equipment; and
(iv) Supply and install 3 drip/sprinkler irrigation systems (each covering 200ha) for crop production.
Sub-component 1.2: Certified Seed Systems Improvement (ZAR 0.21 billion, 14.5%):
(i) Supply and install 169 standard drip/sprinkler irrigation systems (each covering 10ha) for production of certified seeds (maize, pearl millet, sorghum and cowpeas);
(ii) Procure assorted machinery and equipment for certified seed production and processing;
(iii) Facilitate certified seeds production under dryland/rainfed and irrigation;
(iv) Support 200 certified seed inspection activities (seed production under dryland/rainfed and irrigation);
(v) Facilitate certified seeds distribution to silos; and
(vi) Construct 1 full-house certified seed processing plant.
Sub-component 2.1: Capacity Building (ZAR 0.07 billion, 4.8%):
(i) Support 3 agricultural institutions, under MAWF;
(ii) Sensitise and mobilise communities/beneficiaries;
(iii) Form/strengthen 111 farmer cooperatives;
(iv) Train 2,100 households in food security and nutrition activities;
(v) Support infants feeding programme (Government support);
(vi) Train 4,000 farmers in various agriculture-related practices; (vii) Facilitate international training for 5 MAWF staff (Training of Trainers/ToT, covering operation and maintenance of agricultural machinery and equipment); (viii) Conduct national/local training for 28 MAWF staff from the participating Regions (Training of Trainers/ToT, covering operation and maintenance of agricultural machinery and equipment); (ix) Facilitate implementation of ESMP activities; and (x) Support gender mainstreaming activities.
Sub-component 2.2: Project Management, Monitoring and Evaluation (ZAR 0.36 billion, 25.4%);
(i) Establish and support the Project Coordination Unit (PCU) including recruitment of 3 TAs for MAWF;
(ii) Facilitate 5 financial audits;
(iii) Establish and support activities of Project Steering Committee (PSC);
(iv) Carry out Project coordination activities;
(v) Prepare and operationalize Project Implementation Manual;
(vi) Establish and operationalize gender sensitive participatory Monitoring and Evaluation (M&E) system; (vii) Prepare 5 Project annual work plans and budgets; (viii) Conduct 70 Project progress review meetings; and (ix) Conduct 2 surveys and 2 reviews (MTR & PCR).
The Project cost, including physical and price contingencies, is ZAR 1.42 billion (net of taxes and duties) which will be financed by
(i) ADB Loan of ZAR 1.00 billion (70.5%) covering all major Project activities,
(ii) the Government contribution of ZAR 0.36 billion (25.5%) through in-kind (monetary value) for existing Government staff salaries participating in Project activities, office space, and office utilities, and
(iii) beneficiaries in-kind contribution of ZAR 0.06 billion (4.0%) through specific labour during agricultural production activities and also valuable time for attending training sessions. The price contingencies were based on projected local and foreign inflation rates of 5% and 2% per annum, respectively. The physical contingencies ranged from 0% (Government staff salaries) to 8% (works) based on common technical practices.
Project Areas: The agricultural mechanisation scheme will be implemented nationwide (14 Regions of Namibia) whilst seed systems development scheme will be implemented in the Kavango East, Kavango West, Oshana, Omusati, Oshikoto and Zambezi Regions.
The Project goal is to contribute to poverty reduction and economic growth. The Project's objectives are to improve household food security and nutrition, job creation, improved household incomes and lives of rural people through increased agricultural production and productivity.
The liquidity constraints in the domestic market have reduced the demand for the Government paper, impacting on the authorities' capacity to raise money domestically, a traditionally preferred modality for gap financing. In this context, the Government and the Bank agreed on 2 interventions to meet both short term and long term financing needs comprising
(i) a budget support operation (ZAR 6 billion, approved in May 2017) to support the Government's bold reform programme and finance the fiscal deficit, and
(ii) an investment programme (ZAR 4 billion) to fill the financing gaps created by fiscal consolidation measures in 'ready to go' HPP projects. The NAMSIP (ZAR 1 billion) is part of the ZAR 4 billion investment programme and complements the approved ZAR 6 billion PBO by addressing mechanisation and infrastructure bottlenecks in the Agriculture Sector. NAMSIP will significantly contribute to Government's plans to eliminate "Hunger Poverty" and achieve "zero deaths" (HPP outcome ' 7) as a result of hunger, improve food security and promote import substitution of staple foods by focusing on cereal and livestock value chains with the aim of improving productivity and value addition. NAMSIP will contribute to achievement of Sustainable Development Goals (SDGs)
(i) '1 (No Poverty) since growth in agriculture is effective at reducing poverty,
(ii) '2 (Zero Hunger) since efficient crop production improves food security and nutrition, and '5 (Gender Equality) since giving women resources boasts agricultural productivity.
The Project is aligned to one of the Bank's Ten Year Strategy (TYS: 2013-2022) core operational areas of infrastructure and also areas of special emphasis namely agriculture and gender in that it will improve availability and access of agricultural mechanisation and certified seeds, enhance household income, food security and nutrition, and gender mainstreaming. Gender mainstreaming is also in line with Pillar II of the Gender Strategy (2014-2018). The NAMSIP is fully aligned to the Bank's 2 priority High-5 areas, namely,
(i) Feed Africa, and
(ii) Improve the quality of life for the people of Africa. Based on the Feed Africa Strategy for Agricultural Transformation in Africa (2016-2025), NAMSIP design has adopted a value chain approach to simultaneously address various challenges or weakest links in a manner that increases production and productivity, value addition and creates an enabling agribusiness environment. NAMSIP will focus on Feed Africa Strategy (2016-2025) Enabler '1 -"Increase Productivity" through provision of agricultural mechanisation and improved certified seeds (maize, pearl millet, sorghum, and cowpeas), since this is the main weakest link of the cereal crops value chain. The other elements of the cereal value chain require minor interventions which are currently being addressed by the Government and also the State Owned Enterprises (SOEs). In addition, the Project will promote green growth by improving ground cover through intensive crop production in drought-prone areas of Namibia while ensuring inclusiveness of rural men, women and youths as direct beneficiaries. The Project will improve Private Sector participation in supply of agricultural machinery and equipment. The NAMSIP is in line with the Bank's Country Strategy Paper (CSP: 2014-2018), which is anchored on two pillars:
(i) Infrastructure development - transport, energy and water; and
(ii) private-sector development - improving the business environment and skills.
The Bank's active portfolio in Namibia, as at May 2017, comprised 7 on-going projects with a total commitment of UA 577.3 million. The financial sector dominates the portfolio with 43.1%, followed by transport sector with 28.3% and Multi-sector with 28.5%. The Projects are mainly funded through the ADB public-sector window (99.83%) and MIC TAF Grant (0.17%). Multi-sector operations include a budget support operation, and MIC grant technical assistance projects supporting Walvis Bay Corridor Group capacity building and studies, PPP institutional strengthening, statistical capacity building, and higher education quality assurance. According to the Bank's monthly monitoring report/Portfolio Flashlight, Namibia has the best performing portfolio, with 86% of the active projects performing satisfactorily. There is no problematic or aged operation. The average age of the portfolio is 3 years. The disbursement rate has significantly improved, increasing from 11.1% in September 2015 to 51.2% in May 2017. The key challenge underlying portfolio quality is 'delays in project start-ups'. This is largely attributed to weak national capacity to meet compliance with Bank safeguards and regulations, and slow business processes from the Bank side. There is no Agriculture Sector project in Namibia. There is no backlog of PCR of completed agriculture operations.
The agriculture mechanization scheme, if fully implemented, will target 58,900 crop producers (31,511 female and 27,388 male) with about 117,857 ha of land to be serviced per annum and thus within a period of 5 years the scheme will benefit approximately 294,500 producers (157,558 female and 136,942 male) on 589,285 ha under production. The Project will directly target and empower 10,000 livestock producers, including 2,500 livestock women farmers (resettled and emerging livestock farmers). In addition, 33 extension and veterinary staff will be capacitated on agriculture mechanization for transfer of skills to the beneficiaries of the scheme. The Project will fully support 111 farmer cooperatives whose members will be direct beneficiaries. The Project will generate about 100,000 jobs (40,000 for women and 10,000 for youth) in agricultural production, production, processing and marketing operations. The Project will also indirectly benefit about 300,000 people from dryland/rainfed agriculture and irrigation through generation of employment along the cereal and livestock value chains who will include suppliers, local traders, casual labourers, agro-processors, millers, packaging industries, transporters, rural youth and women. About 500,000 people will indirectly benefit and be food secure due to improved cereal crop production.
The FIRR is estimated at 10.0% and NPV of ZAR 170.35 million. The EIRR is 25.16% and NPV of ZAR 1.70 billion.
SILUNGWE Yappy Gregory - RDGS2