Opinion on Musho’s praise

RAINER RITTER WRITES:

Namibian Sun published a frontpage article and it was stated in the report that Cabinet adopted a resolution on 28 April that the Meatco 2024/25 annual report omitted that the former CEO, Mwilima Mushokabanji (Musho), should be credited for his extraordinary contribution to increase the revenue of Meatco from N$1 202 million to N$1 865 million. Cabinet directed that the agriculture ministry must ensure that Musho is credited for the 55% increase in revenue. The editorial of the Sun newspaper went even further and Wonder Gushu wrote: “Cabinet deserves commendation for directing that Meatco’s 2024/25 annual report be amended before it is tabled in Parliament to recognize former chief executive Mwilima Mushokabanji for leading the corporation when it recorded a remarkable 55% increase in revenue and returned to profitability.”

Musho led Meatco for five years, from January 2020 to end of January 2025, coinciding with Meatco’s financial year. Was the increase in turnover extraordinary and did Musho returned Meatco to profitability? Should the annual report be amended to include the 2024/25 extraordinary achievements?

The revenue of Meatco increases when there is a national drought, especially when Meatco was in a quasi-monopolistic position. 

During a drought the revenue increases since producers have to market cattle and reduce their stock. This happened in 2015 (N$1 803 million), 2019 (N$1 784 million) and in 2024 (N$1 865 million).

The 55% increase in revenue during the last year of Musho’s term was a result of adverse climatic conditions and not an extraordinary marketing effort, directing praise for Musho would be the wrong statement within a professional governance context. 

The second question which arises from the frontpage article in the Namibian Sun, is the question of turning Meatco back into profitability. Is Meatco profitable in 2024/25? Yes, Meatco did record a profit (after tax) of N$43.8 million in 2024/25 and a loss of N$67.5 million in 2023/24. The Sun reported that the profit for 2024/25 was N$105.7 million, but this was the profit before tax. But is this the actual profit as reported in the income statement? Meatco has received a government grant of N$86 million in 2023, a grant of N$125.5 million in 2024 and N$216.6 million in 2025. The Namibian taxpayers provided N$428.1 million to Meatco over a period of three years. If one discounts the profit/loss after tax in the income statement with the government grant received for the last three years, the picture is totally different. The accumulated losses since 2021 were N$-893.5 million.

What the media also did not report was that the bad debts were N$26.1 million in 2023/24 and N$81.4 million in 2024/25. Why is Meatco making such significant losses. The answer is simple, inefficient and poor management and poor governance. Beef slaughterhouses/abattoirs is a low-margin high-volume business and therefore one can accept that the international benchmark for the gross profit margin should be around 12%. Namibia is exporting the beef and therefore it must benchmark itself against international beef exporters in other countries. The average gross profit margin in the decade before Musho was 8.4% and the average margin in the ensuing 5-year period was 3.76%. A gross profit margin below 5% is an indication that an abattoir is not commercially viable and has thus ineffective and portrays poor management.

One can conclude that future Cabinet submissions must be well researched and argued, otherwise the taxpayers who supported Meatco with N$428.1 million feel betrayed if poor management is praised. Newspapers should also not blindfolded “clap hands” if public funds are misused.  

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