A deal made in paradise

Dinner with a view

It was a bit of an initiative test getting to the new Nkasa Lupala lodge, nestled between Mudumu and Mamili national parks. First the bridge was down. This simple pole construction is a lifeline to the lodge, Mamili Park, and to Wuparo Conservancy which has a joint venture agreement with the lodge's Italian owners. Within hours plans had been made in the conservancy office for its repair, but that was no help to the tourist couple from South Africa.

The river was a metre deep – just about bonnet height – and it was a bit of a risk with the hire car, but in they plunged, and thanks to the firm sand on the river bed, out they came. Then there were the elephants.

A leafy green tree was lying right across the sandy track. The culprits were soon to be found on the other side of the tree, and of course that's just what every tourist wants to see. But as we all know, elephants are wild animals, and these ones were not to be hurried. There is only one track through the dense bush to the park and the lodge, and this one was occupied by elephants showering with water remaining from the floods and talcuming themselves with sand. The young calves were just rolling in the mud. A good opportunity for a photo, and a three hour wait.

But sitting it out was worth it, and judging by reports from the Conservancy staff, the ten year wait to find an investor to build a lodge right on the doorstep of Mamili National Park was worth it as well.

To understand why a communal conservancy would want to be involved with a tourist lodge, it helps to think of a conservancy in the same terms as a commercial farm. Since the 1960s, commercial farmers in Namibia have had rights over wildlife. They can shoot wildlife on their land (except protected species), and they can build lodges. Income from trophy hunting and tourism is in many ways a better bet than cattle farming.

Since 1996, people on communal land have been empowered by legislation to set up conservancies with similar rights over wildlife and tourism. They can sell game to trophy hunters, hunt for meat to sell or consume, and they can set up lodges. But building and running a lodge requires capital and special expertise, including marketing. Most rural communities just don’t have the cash or the skills.

Wuparo was officially gazetted as a conservancy by the Ministry of Environment and Tourism (MET) in December 1999. Like all conservancies, Wuparo aims to protect wildlife and to provide income from it, and in the long term to encourage the growth of skills in wildlife management and tourism. Support came from two NGOs: the IRDNC (Integrated Rural Development and Nature Conservation) and the WWF.

These NGOs have been the midwives to new born conservancies, assisting in negotiations with the MET, and building up a wealth of experience in the process. The IRDNC office in Caprivi is staffed by Caprivians, and that’s no accident. As locals speaking to locals they can provide technical guidance that is relevant and welcome.

For over ten years, Wuparo’s main income came from hunting revenues. The MET sets quotas that allow hunting while maintaining stable wildlife populations. The area between Mamili and Mudume National Parks is teeming with elephant and buffalo, and the annual quota brings in significant earnings: well over half a million Namibia Dollars in 2011. But a conservancy is a business with staff. It employs 10 game guards and a management team. It needs to maintain a 4x4 vehicle and an office. It is self-sustaining, but there isn’t much cash left over to distribute to members, or for conservation activities.

Additional income came from a community camp site – Rupara. The site offers simple ablutions next to the river, and takes just N$60 per person. Not a big money spinner. Wuparo needed a lodge, and for that it needed an investor. Enter the Micheletti family.

The Michelettis come from Italy, and the father ran a construction business in West Africa, where the three boys spent time growing up. Simone is the one with the passion for tourism, and he forged the alliance with Wuparo Conservancy. As the Nkasa Lupala Lodge manager, he speaks for the family.

“We came here as visitors in 1995 and fell in love with the area.” It’s not hard to see why. The river gives way to reeds, grass and trees, and lions hunt buffalo in plain view of the breakfast table. "We met Hans who was working as a guide at Lianshulu Lodge and he said that the government was building bridges to Mamili Park, so we came to speak to the conservancy. At first they were sceptical. Others had come before, but nothing had come of it. They wanted a serious proposal. We did it the African way - we sat under a tree and looked each other in the eyes. After 3 meetings, Reuben [from IRDNC] stepped in and things got better and better and better."

The conservancy tells a similar story, albeit less romantically. The Acting Deputy Chairperson is ‘Shine’ Limbo, who negotiated on behalf of the conservancy. “It was a big job, a hard job,” he recalls, “with a lot of small pieces to put into place.” Limbo is a rural farmer, and hard nosed commercial deals were not his speciality. He says that negotiations with a previous investor had failed because they were not open about their projections and empowerment plan.

But if Limbo and his colleagues were fresh from the fields, how did they become so savvy while dealing with the Michelettis – experienced business people? That’s where the IRDNC and WWF came in.

Reuben Mafati provides business training and advice to Caprivian conservancies from the IRDNC office in Katima Mulilo, Caprivi Region’s capital town. Further technical support comes from Richard Diggle in the WWF office in Namibia. Over the years the NGOs have helped conservancies to negotiate contracts with investors building lodges and camp sites. These are called Joint Venture Agreements, JVs in the jargon, and they amount to much more than the cash benefits a conservancy may get from a deal.

Benefits come in two forms: direct and indirect. For the use of  land and protection of wildlife, the lodge will pay a direct levy to the conservancy. Although the conservancy does not own the land and cannot legally  lease it out, it has been given the rights over wildlife and tourism by legislation. Indirect benefits come in the form of employment. Local people will look for jobs in the lodge, and might sell goods to it, like vegetables or firewood.

The Michelettis got down to business with Wuparo Conservancy, with the IRDNC and WWF in the background, advising the conservancy management committee. The NGO team had done this all before. They could draw on the experience of negotiations with Wilderness Safaris and Namibia Country Hotels, where conservancies in Namibia’s Kunene Region earn a percentage of the turnover. They could call on lawyers to advise on contracts. And the WWF has designed a unique instrument called a financial dashboard, which allows a conservancy to keep a watchful eye over the lodge finances without requiring a diploma in book-keeping.

When the deal was done, it was a good one, including the indirect benefits. The Michelettis agreed on an initial forty percent of the staff coming from the area, with training to increase the number as time went on. In fact, eleven out of the twelve employees come from the nearest village, Sangwali, and the other empoloyee is from the region. Originally the idea was that each of the seven management areas of the conservancy would provide at least one staff member. It was well intentioned, but just didn’t work out. The problem was solved by the negotiating skills of an older employee known as the Induna (or chief), who helped the Michelettis to understand the local people and customs.

Training is the next indirect benefit, and here the lodge struck lucky twice. Bertha Luyanzo comes from Sangwali, but had worked her way up to lodge assistant manager with Wilderness Safaris. She wanted a local job and was willing to train the staff. Hans Fwelimbi was the guide who had introduced the Italians to the area, and was a tour guide. The lodge deal includes a set-aside fund for training, and Hans was the first to benefit from FGASA training (Field Guide Association of Southern Africa). Other guides are expected to follow him for training in South Africa soon.

But most important is money. The lodge pays the conservancy a fixed amount monthly, and on top of that a percentage of the turnover after agents’ commissions have been deducted. That’s where the deal gets interesting, and the Millennium Challenge Account (MCA) steps in. The MCA Namibia Compact provides grant funding from the US government  for public investments in education, agriculture and tourism, and is giving direct support to 29 selected conservancies in the north of Namibia, with an emphasis on training in business skills and marketing.

Wuparo will only do well out of the lodge if the number of tourists increases. In fact the percentage of the take will rise as that happens - that was part of the deal. The MCA is providing a grant of one million Namibia Dollars (around US$143,000) to Wuparo to boost the marketing of the lodge. Wuparo will lend the money to the lodge, which will spend it on marketing. As the turnover increases, so does revenue to the conservancy - call that the interest on the loan. At the end of the agreement the loan will be written off.

Will it work? Simone Micheletti is sure it will. The lodge has ten rooms and he is aiming at experienced tourists who have been to Africa before and know what to expect. “It’s a destination,” he says. “We want to keep it simple, but exclusive, for people who want to stay in the wilderness." Wild, yes – and beautiful. The area is lush with grass, reeds, and the birds and wildlife that inhabit this corner of Caprivi's wetland paradise. He looks out across the conservancy land and says: “For us it’s a dream come true.”

And for the conservancy? The members of the management committee believe they have done well. As ‘Shine’ Limbo puts it: “Compared to other lodges in Caprivi, this is a good deal.” In fact, the agreement says that after ten tears the lodge buildings will belong to the conservancy. At that point Wuparo and Nkasa Lupala will negotiate a new deal about how to run the lodge.

But there is more at stake. The eco-system and the wildlife it supports has to be protected. That’s the conservancy’s job. With increased income from the lodge the salaries for the game guards will be secure. Wuparo is giving up land that could be used for farming, and making it available for wildlife. In return, the lodge is paying for a conservation service. It’s a deal both sides are happy with.

Steve Felton
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