Communal Cold Storage Infrastructure for Farmers
Communal Cold Storage Infrastructure for Farmers
Business Model Description
Develop communal cold storage facilities for commercial farmers to store horticulture products for the export market.
Expected Impact
Improve the supply chain of agricultural produce to enhance food security in Namibia and promote export to regional markets in the Southern African Development Community (SADC).
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Namibia: Hardap Region
Sector Classification
Food and Beverage
Development need
25% of Namibia's population is food insecure (II), including due to persistent drought situations (IV) and the country's farmers facing challenges to access affordable financing (V). SDG 2 on Zero Hunger is "stagnating" and faces "major challenges" in Namibia (I).
Policy priority
As captured in Namibia's 5th National Development Plan (NDP5), the Government seeks to transition from a provider of live animals to exporting value-added agricultural goods, and increase food and livestock production by 30% and 10% in 2022 (II). Although the agriculture sector only contributes 3-5% to GDP, it is a Government priority as it employs 23% of its population (III).
Gender inequalities and marginalization issues
The majority of the 167,242 jobs in Namibia's agriculture sector are within rural areas of the country. Only 21.1% of the workforce is female (III), signaling a major opportunity to provide additional income generation opportunities for women.
Investment opportunities introduction
Agriculture, among others, generates significant multipliers: an increase in final demand of NAD 1 million (USD 72,000) for traditional agriculture is likely to generate an output twice that value as well as GDP and income for roughly the same value (VI). This is expected to lead to the development of Namibia's economy and result in poverty alleviation (V).
Food and Agriculture
Policy priority
Namibia's Government focuses its efforts for greater food security on developing the agro-processing industries by utilizing local produce and strengthening regional value chains, as well as increasing the agricultural production for cereals, horticulture and livestock (II).
Gender inequalities and marginalization issues
An increase in final demand for traditional agriculture is expected to generate the highest impact among low-income households in Namibia, benefitting marginalised communities and women, among others (VI).
Agricultural Products
Pipeline Opportunity
Communal Cold Storage Infrastructure for Farmers
Develop communal cold storage facilities for commercial farmers to store horticulture products for the export market.
Business Case
Market Size and Environment
Namibia consumes over USD 45 million worth of fruits and vegetables annually.
Namibia consumes USD 15.64 million worth of fruits and USD 31.29 million worth of vegetables annually (5).
Agriculture contributes 66% to the value of intra-regional trade in the Southern African Development Community (SADC), which presents a major opportunity for Namibia to become a fresh produce hub for landlocked southern African countries (6).
Indicative Return
20% - 25%
A benchmark project, a small scale cold storage facility at the Ndonga Linena Farm, achieved and IRR of 21.25% (9).
Investment Timeframe
Short Term (0–5 years)
No empirical evidence exists in Namibia; based on subsector characteristics, the investment timeframe is estimated to be below five years.
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Business - Supply Chain Constraints
Market - Highly Regulated
Impact Case
Sustainable Development Need
Namibia's food insecurity stands at 25% and needs to be reduced to 12% by 2022, according to the Government (1).
Namibia's national food storage capacity can sustain its population for only three months. By 2030, the Government is aiming to have increased the national grain storage capacity to 67,000 metric tonnes, which would be sufficient to sustain the nation for a period of 12 months (5).
Namibia lacks adequate storage facilities that allow for agricultural value addition. Cold storage facilities needed to maintain the lifespan of fresh produce are limited, which results in raw products being exported and re-imported into the country for value addition (5).
Gender & Marginalisation
Marginalised communities of Namibia face the greatest challenges in accessing food and are most likely to be food insecure.
Expected Development Outcome
Enhanced integration of smallholder farmers into large-scale agricultural value chains, resulting in improved market opportunities, by providing them with access to modern storage facilities (1, 3).
Reduced amount of losses of perishable products (3), which enhances profitability of agricultural activities and reduces impact on the environments.
Gender & Marginalisation
Marginalised farmers obtain access to market opportunities, and operate more efficiently and sustainably thanks to reduced losses of produce.
Rural areas of Namibia, characterised by high levels of agricultural activities, benefit from local economic opportunities.
Primary SDGs addressed
2.1.1 Prevalence of undernourishment
2.3.1 Volume of production per labour unit by classes of farming/pastoral/forestry enterprise size
2.3.2 Average income of small-scale food producers, by sex and indigenous status
9.2.1 Manufacturing value added as a proportion of GDP and per capita
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Indirectly impacted stakeholders
People
Corporates
Outcome Risks
Cold structure infrastructure requires significant energy, which can strain the already limited grid capacities and generate negative environmental impacts if not managed and sourced sustainably.
Impact Risks
Traditional practices and unfamiliarity with modern technologies may limit uptake especially in remote and marginalised areas.
Impact Classification
What
The outcome is likely to be positive, important and intended because cold storage infrastructure provides a temperature supply chain towards greater food security and safety.
Risk
While the cold storage technology is readily available, the model requires linkages and high national yields to reach profitability.
Impact Thesis
Improve the supply chain of agricultural produce to enhance food security in Namibia and promote export to regional markets in the Southern African Development Community (SADC).
Enabling Environment
Policy Environment
Food and Nutrition Policy, 1995: Promotes the maintenance of strategic grain reserves by the private sector through a combination of storage alternatives at national, regional and farmer levels (8).
Food Safety Policy, 2014: Ensures food safety for all consumers, and provide sufficient food safety guarantees on all food products traded nationally or exported to other countries (10).
Financial Environment
Other incentives: The Green Scheme makes available NAD 1 billion (USD 67 million) for investment in the agricultural sector of Namibia over a period of ten years (7).
Regulatory Environment
Cold Storage Works and Abattoirs Proclamation, 1921: Guides the construction and operation of cold storage infrastructure and defines requirements also for export of produce (11).
Marketplace Participants
Private Sector
Investors such as Agribank Namibia and the Development Bank of Namibia. Business such as the existing cold storage at the Green Scheme's Ndonga Linena Farm.
Government
Ministry of Agriculture, Water and Land Reform (MAWLR), Namibian Agronomic Board (NAB), Namibia Agricultural Union, Namibia Industrial Development Agency (NIDA).
Non-Profit
Agricultural Trade Forum of Namibia, Dairy Producers Association (DPA), Namibia Emerging Commercial Farmers Forum (NECFF), Namibia National Farmworkers Union (NAFWU), Namibia Grain Producers Association (NGPA).
Target Locations
Namibia: Hardap Region
References
- (I) SDG Center for Africa and Sustainable Development Solutions Network, 2019, Africa SDG Index and Dashboards Report 2019, Kigali and New York: SDG Center for Africa and Sustainable Development Solutions Network, https://sdgcafrica.org/we-content/uploads/2019/06/SDGS_INDEX_REPORT_2019WEB.pdf. II) Republic of Namibia, National Planning Commission, 2017, Namibia's 5th National Development Plan (NDP5), https://www.npc.gov.na/?wpfb_dl=294. III) Martha Nangolo & Ndapwa Alweendo for Institute for Public Policy Research (IPPR), 2020, Democracy Report. Agriculture in Namibia: An Overview, https://ippr.org.na/wp-content/uploads/2020/02/Agriculture-in-Namibia-An-Overview.docx-10.pdf. IV) Republic of Namibia, National Planning Commission, 2018, Implementation of Sustainable Development Goals, Voluntary National Review, https://sustainabledevelopment.un.org/content/documents/19880New_Version_Full_Voluntary_National_Review_2018_single_1_Report.pdf. V) Republic of Namibia, National Planning Commission, 2018, Is Agricultural Productivity an engine for growth, https://www.npc.gov.na/?wpfb_dl=357. VI) DNA Economics, 2021, SAM Multiplier Analysis for the SDG study in Namibia, Six Capitals.
- (1) Republic of Namibia, National Planning Commission, 2017, Namibia's 5th National Development Plan (NDP5), https://www.npc.gov.na/?wpfb_dl=294.
- (2) Republic of Namibia, Ministry of Trade and Industry, Growth at Home, Namibia’s Execution Strategy for Industrialization, http://www.mti.gov.na/downloads/GrowthinNamibia.pdf.
- (3) Food and Agriculture Organization of the United Nations, 2016, Agroindustry Policy Brief 2. Developing the cold chain in the agri-food sector in sub-Saharan Africa, http://www.fao.org/3/a-i3950e.pdf.
- (4) Republic of Namibia, Namibia Statistics Agency, Namibia Census of Agriculture 2013/14, https://d3rp5jatom3eyn.cloudfront.net/cms/assets/documents/Namibia_Census_of_Agriculture_2013_14_Revised_Report.pdf.
- (5) The Research Department of the Bank of Namibia, 2017, 18th Annual Symposium: Feeding Namibia: Agricultural Productivity and Industrialisation, https://www.bon.com.na/CMSTemplates/Bon/Files/bon.com.na/52/52c35978-5912-4429-9052-3c8f5cc7971e.pdf.
- (6) Southern African Development Community, 2011, Regional Agricultural Policy (RAP) Country Summary Agricultural Policy Review Reports, https://www.sadc.int/files/7113/5293/3509/Regional_Agricultural_Policy_Review_Reports_2011.pdf.
- (7) Ministry of Agriculture, Water and Forestry, 2008, Green Scheme, http://extwprlegs1.fao.org/docs/pdf/nam170606.pdf.
- (8) National Food Security and Nutrition Council, 1995, Food and Nutrition Policy of Namibia, http://www.nafsan.org/wp-content/uploads/2020/08/National-Food-and-Nutrition-Policy-Namibia_1995.pdf.
- (9) Turnaround Strategy for the Ndonga Linena Green Scheme on behalf of Passage Investments by Dr. Loneson Mondo (MBA, DBA), 2011, Available on request from Loneson Mondo (lonesonmondo@gmail.com).
- (10) Food Safety Policy, 2014, Republic of Namibia, https://www.atf.org.na/issues/article.php?blogID=27.
- (11) Cold Storage Works and Abattoirs Proclamation, 1921, Republic of Namibia, https://laws.parliament.na/annotated-laws-regulations/law-regulation.php?id=12.
- (12) World Bank, 2017, Inclusive Innovations: Storage Solution, www.innovationpolicyplatform.org/system/files/8-Storage%20Solutions_Agri_May30/index.pdf.
- (13) FAO, 2005, Bankable Investment Project Profile: Development of Infrastructure for Marketing Horticulture Produce, http://www.fao.org/3/af315e/af315e.pdf.