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Promotion of sustainable commercial aquaculture in sub-Saharan Africa. Volume 2: Investment and economic feasibility

Year of publication 2002

Place of publication Rome, Italy ;

Pages 54 p.

Author Hishamunda, N.; Manning, P.

Publisher FAO ;

Product type Book (series)

ISBN 9251048339

Series title FAO Fisheries Technical Paper

Series number 408/2

Edition 1

Synopsis (short abstract) This volume of the report on the promotion of sustainable commercial aquaculture in sub-Saharan Africa discusses the difficult access to investment capital, one of the major obstacles to the development of sustainable commercial aquaculture in the region. The problem arises from a lack of collateral, excessively high interest rates on loans, bankers' perceptions that aquaculture carries a particularly high risk of failure, a lack of knowledge, by farmers, of the modalities of applying for loans and a lack or limited information, on the part of lenders, of commercially successful aquaculture enterprises in the region. While some of the lenders' perceptions are valid, particularly in instances where the industry is not yet established and difficulties could occur as a result of local unavailability of necessary inputs, the market is untested and there are no examples of commercial success that could offer an indication of viability, preliminary evidence seems to indicate that banks tend to exaggerate the likelihood of failure of commercial aquaculture projects in sub-Saharan Africa. Borrowers need to be able to formulate and present their business proposals in a precise and concise manner that effectively offers the lender a comprehensive picture of the proposed business, communicates how they expect to profit from the proposed enterprises and generate the funds for the repayment of the loans sought. The problem of collateral could be tackled through the use of “no-collateral” strategies such as group lending, village banks and solidarity groups, alternative collaterals such as titled land and moveable property, which in many cases bespeaks the need for legal and regulatory reforms and through government loan guarantees. When affordable, government loan guarantees and subsidized interest rates could also be used to lessen the problem of high interest rates.

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Hishamunda, N.; Manning, P. Promotion of sustainable commercial aquaculture in sub-Saharan Africa. Volume 2: Investment and economic feasibility. FAO Fisheries Technical Paper. No. 408/2. Rome, FAO. 2002. 54p.

Language English

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    This document examines policies that encourage sustainable commercial aquaculture in developing countries, especially in sub-Saharan Africa. Commercial aquaculture, the rearing of aquatic organisms with the goal of maximizing profit, can contribute to food security and alleviation of hunger, directly by producing food fish and indirectly by generating income for the purchase of food, government revenues, improving a country's balance of trade as an export or as an import substitute, stimulating technological advances, bolstering the development of isolated regions and since it depends on private rather than public funds and is likely to use resources adequately, it is sustainable. However, some forms of commercial aquaculture can cause environmental damage and social conflicts. Stabilisation or decline of the capture fisheries, growing shortage of fish for domestic markets, export opportunities, suitable land and water and cheap labour offer prospects for commercial aquaculture in sub- Saharan Africa. Limited access to credit, shortages and high cost of feed, lack of good quality seed, and a low flow of capital investment hamper its development. Good governance, openness to trade, macroeconomic growth policies, emphasis on private investment as a source of wealth, land security, tax exemptions and holidays, loan guarantees, debt-equity swaps, promotion of large farms, producer associations, strategic planning and transparent regulatory procedures can stimulate the development of the sector.
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    Promotion of Sustainable Commercial Aquaculture in Sub-Saharan Africa. Volume 3: Legal, Regulatory and Institutional Framework 2001
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    This document identifies elements of a legislation that will encourage the emergence of a sustainable commercial aquaculture. The aquaculture law of an individual country must provide the operator with a secure right to conduct aquaculture operations, to the property on which the farm will be located, to good quality water and to the produce. It must also ensure environmental sustainability, through permit or licence systems, without imposing unnecessary costs on applicants. Only proposals with the potential for serious environmental harm should be subjected to a full environmental impact assessment. Environmental supervision must extend to controls over the use of exotic species and products from modern biotechnology including genetically modified organisms, disease control and health management and to any water quality concerns created by the proposed project. To minimise costs, countries are encouraged to adopt a single window approach for the numerous approvals usually required for an aquaculture operation and screen initial applications. They could also consider creating a single agency to promote aquaculture and to monitor the progress of applications. Aquaculture regimes of selected African countries are measured against the elements required to encourage sustainable commercial aquaculture, and improvements that are applicable to all countries in sub-Sahara are suggested.
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