The Agricultural Bank of Namibia has suspended its affirmative action (AA) loan scheme because of weaknesses in the government accounting system, a Namibian minister has admitted.
Agriculture minister Helmut Angula says Agribank’s decision to suspend the processing of new applications for the loan programme for black farmers was “unfortunate”.
But, he admits: “This (moratorium) has, most unfortunately, come about due to our weakness in controlling the accounting systems”.
The minister explains that the government did not have a limit on the number of AA loans that could be approved, yet it only appropriated N$50mn a year for the scheme and this amount had never been increased since the scheme started.
He adds that the annual N$50mn given to Agribank fell short of the amount given out as loans and hence the scheme had run into arrears.
Angula is, however, quick to point out that the cabinet has decided to transfer a “still to be determined” amount from the ministry of lands “to my ministry in order for the scheme to resume”.
He cannot not say when exactly the transfer of money between the two government ministries would be effected, but expects it to happen “as soon as possible”.
The AA loans scheme aims to help established and stronger communal farmers move into commercial areas.
Angula’s statement is the first official acknowledgement of problems affecting the loan scheme since The Namibian reported on December 17 last year that at least 18 applications received by Agribank since October 31 had been frozen.
At the time senior officials from the Agriculture Ministry and the Agribank denied the report.