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Local value addition key to fishing industry growth

2021-10-28  Maihapa Ndjavera

Local value addition key to fishing industry growth
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Maihapa Ndjavera

Production in the Namibian fishing industry has been on a declining trend since 2013. Growth in this sector is expected to remain relatively flat going forward, even potentially transitioning into negative territory in the long run. Now, the most recent forecast shows the industry is expected to grow by 2.8% in 2021 and 3.6% in 2022, compared to the dismal -9.4% in 2020.

According to Local stock brokerage Simonis Storm Securities sectoral insights for the fishing industry for October 2021, most industry players currently operate at full Maximum Sustainable Yield (MSY) and have reached the total allowable catch (TAC) levels set by the government. 

“This means that growth in the industry will not come from additional players in the industry catching more fish, but rather increased value addition activities or processes being established in Namibia. This suggests existing industry players need to invest in establishing factories and processing plants to add value to their fish products before exporting to foreign markets or selling to the local market, to drive growth and indirect job creation in other sectors linked to the fishing value chain,” reads the report. 

Simonis Storm Securities further stated that additional fishing quotas issued in 2020 reduced the market share of each industry player, thereby lowering profits and increasing the time trawlers stay idle for each player. In essence, each industry player operates a smaller market share while the size of the market remains unchanged. 

The report further noted the industry has become a weaker contributor to the Namibian economy since 2009: “While providing a basic necessity, the importance of the sector is on a downward trend and will continue to become a smaller part of our economy if value addition processes are not set up locally, thereby creating additional jobs along the value chain.”

Currently, the industry employs about 15 500 Namibians, with about 12 000 being employed by the local hake sub-sector alone according to the National Hake Association. This excludes indirect jobs created by or dependent on the fishing industry.

According to the report, the sector is faced with some challenges such as the increasing signs of climate change as well as potential adverse natural events that pose a risk to Namibian fisheries in the future. Another major challenge is the misallocation of fishing quotas/rights in the past. As a result, Simonis Storm Securities said large productive vessels left the industry and quotas were distributed to politically connected individuals leaving some of the smaller rights holders to enter into new ventures.

Furthermore, Covid-19 regulations, closing businesses in the hospitality and restaurant industry led to a decrease in demand for Namibia’s fish exports. The report added the value of fish exports decreased by 35% between April 2020 and November 2020. 

Meanwhile, the value of fish exports bottomed out in November 2020 and have stabilised somewhat at about N$800 billion since April 2021. However, the decrease in demand was recovered within the local hake industry via exports to supermarkets in Europe. 

- mndjavera@nepc.com.na

 

Caption (fishing.jpg): Still in demand…Fish products have accounted for 13% of total exports on average since January 2021, making this the second biggest export product category after commodity export products. Photo: Contributed 


2021-10-28  Maihapa Ndjavera

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