World Aquaculture Society Meetings

facebook

Your browser does not support the most current secure communications protocol. The World Aquaculture Society is committed to the security of your private information. In order to accept credit card data on this site we are recquired to be in compliance with Payment Card Industry (PCI) standards. Current PCI standards will not allow us to accept traffic from browsers that do not support TLS 1.2 after June 30, 2018. We are alerting you to the important need to update your browser. Changes to our web server made on or before June 30, 2018 will make was.org unavailable with the browser you are currently using. [More..]

Special Session on Financing African Aquaculture

Africa needs aquaculture. Fish provide 22% of the protein intake in sub-Saharan Africa, but exceeds 50% in the poorest countries (especially where other sources of animal protein are scarce or expensive). In West Africa, the proportion of dietary protein that comes from fish is extremely high: 47% in Senegal, 62%, in Gambia, and 63% in Sierra Leone and Ghana. However, fish supply in Africa is in crisis. Per capita consumption in sub-Saharan Africa is the lowest in all regions and it is the only part of the world where consumption is declining, falling by over 2 kg/pers/year since 1985, driven by stagnant capture fish production and the still-growing population. Just in order to maintain the current supply (6.6 kg/pers/year), African aquaculture has to grow by 267% by 2020.

Models used by the World Bank Group (WBG) show that more poverty alleviation and more equitable economic growth is generated when a larger number of Small and Medium Scale (SME) scale investments satisfy a market, compared to one or a few larger firms. However, in Africa, investment capital for SME businesses is scarce. Without the engagement of formal lending, sectoral growth remains below its potential and only an investment for the relatively wealthy. Another problem associated with the lack of bank engagement is the absence of any leverage for responsible behavior in a sector that has been repeatedly beset by disease and other problems resulting from the failure to adopt best practices.

To assess the approximate scale and financing needs of SME Aquaculture Investments around Africa, a brief survey of currently active farms was carried out over the course of 2016. There seem to be two models, one smaller scale with projected average CAPEX and initial OPEX of around $1 million, and another medium scale averaging about $7 million. The overall average is $4.4 million. These systems cover virtually all types of commercially viable aquaculture technology that has been demonstrated elsewhere.

One thing nearly all of the surveyed farms have in common, is the reliance on personal or family capital with minimal engagement with local banks, which offer only relatively short term loans (<1 year) at high interest rates (~25%). From an initial assessment, most are under-capitalized and few are operating off of professional business plans.

A special session has been organized for the WAS Annual Meeting in Cape Town, RSA to review the status, growth potential and risk profiles of African aquaculture investments, with a focus on the amounts and types of capital needed to help the sector produce revenues, jobs and fish for a growing continent. The session will feature presentations from aquaculture specialists from a range of financial and development institutions interested in African aquaculture, and plenty of time for questions and discussion with a view to helping farmers better understand the constraints for bankers, and helping bankers understand the opportunities in the aquaculture sector.

Randall Brummett
Environment and Natural Resources Global Practice
World Bank
1818 H St. NW
Washington, DC 20433

Copyright © 2001-2017 World Aquaculture Society All Rights Reserved.