Namibia's Minister of Agriculture, Water, and Land Reform, Calle Schlettwein has disclosed that the Government was no longer proceeding with the Chinese investor for the tobacco project in the Zambezi region due to its inability to meet up with the conditions.
“The investor for the tobacco project in the Zambezi region could not agree with the conditions as approved by the Cabinet. The project, therefore, did not proceed,” Schlettwein stated.
The company – previously known as Namibia Oriental Tobacco Corporation CC – applied for land measuring 10 000 hectares at Liselo, outside Katima Mulilo in north-eastern Namibia in April 2013.
The company is now known as Zambezi Modern Agriculture Plantation (Pty) Ltd and applied to lease the land for 99 years.
Details of the Cabinet's terms and conditions on this project are included in a Cabinet Committee on Trade and Economic Development (CCTED) report dated 10 September 2020.
The document contains conditions set out by the Cabinet, the investor's responses to the said conditions, and recommendations by the committee.
The conditions include the reduction of the lease period to 25 years with an option of renewal, depending on the performance of the project.
The Chinese investors wanted 99 years.
Another recommendation from the Cabinet was for the government to consider using land as equity participation in favor of the Mafwe Traditional Authority.
“The investor must enter into a joint venture with other Namibian companies to allow more participation of Namibians, and increase the share of the Mafwe Traditional Authority.”
“The Ministry of [Industrialization and] Trade established a partnership with the investor to process the timber harvested from the said project locally.” the Cabinet report stated.
According to the report, the value addition of the proposed plant – up to the final product – would be completed in Namibia, but 100% of the tobacco produced would be exported and sold outside the country.
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