State owned Agricultural Bank of Namibia (Agribank) faces collapses having failed to recover 80 percent of debt owed to it, the country’s Auditor General said in latest report.

“For the past two financial years the recovery rate remained below 20 percent and this trend has continued for the period after the financial year-end. Audit is concerned about the inadequacy of credit controls exercised by the bank,”said Namibian Auditor-General Junias Kandjeke in the report.

The report also highlighted a number of lawsuits currently involving Agribank, which has the potential to affect its financial position.

Kandjeke added that “Agribank generally has adequate security in place for most of its loans, but adds that the impact of current poor debt collection on its liquidity was concerning.”

Agribank of Namibia owned by the Namibian government is an agricultural bank with a mandate to play a leading role in financing the country agriculture sector and also serves a diverse clientele base, farmers and non-farmers. The bank started way back in 1907 as Deutsch-Sudwestafrikanischer Farmerbund.

Agriculture in Namibia contributes around 5 percent of the nation’s Gross Domestic Product, though 25 percent to 40 percent of Namibians depend on subsistence agriculture and herding. Primary products included livestock and meat products, crop farming and forestry. Only 2 percent of Namibia’s land receives sufficient rainfall to grow crops.

By George Mpofu