Monkagedi Gaotlhobogwe
8 January 2009
What looked like a small project initially expected to cost government P36 million has ballooned into a major headache for administrators at the National Development Bank with demands on the FMD Relief Fund for Okavango and Ngami Districts climbing up to P104 million in one year.
The bank has so far paid out P81 million to 4,863 farmers. The Bank says it branded and gave out 59,486 head of cattle.
The Maun branch says 10,000 more cattle have been branded, but not distributed.
The NDB is being choked by the extraordinary demand for funds in Ngami and Okavango where the bank finds currently itself stuck with a debt of an extra P23.2 million owed to cattle farmers who traded their cattle through the Bank.
Many farmers in the area are lining up for the FMD Relief Fund scheme set up last year to help farmers whose cattle were badly affected by foot and mouth.
The Ngami and Okavango Districts have a combined 350,000 cattle population and 10, 000 farmers, but the perpetual outbreak of FMD in the area has resulted in the restriction of cattle movement in the area rendering the cattle unsuitable for slaughter in the Botswana Meat Commission Abattoirs.
The government last year set up the FMD Relief Fund, a cash advance scheme that enables farmers to pledge cattle as security.
The fund pays P1,500 per sellable animal and farmers can pledge up to 30 cattle at a time.
The maximum cash advance is P45,000, with no interest. The initial fund was P36 million, but already the bank is struggling to pay out P23.2 million to farmers after the initial budget was exhausted.
The NDB fund manager in Maun, Mokalane Nkwe, says they had to ask for an extra P45 million soon after the initial P36 million was exhausted in a short time.
However, "by the time the P81 million was exhausted," the NDB fund manager says, "they had disbursed P89, 202,000.
"That means we have an overdraft of P8.2 million. We have written these cheques, but we cannot issue them because there is no money in the Bank. The farmers cannot cash P8.2 million of written cheques because there is no money. An extra P15 million in cheques is yet to be written to the farmers.
But the Bank cannot do so because it is still waiting for government to replenish the funds before writing the cheques.
There is no certainty about when government will refill the project coffers. In addition, 745 farmers are still waiting to be assisted under the scheme.
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