Local added value is the key to the growth of the fishing industry
Production in the Namibian fishing industry has been trending downward since 2013. Growth in this sector is expected to remain relatively stable in the future and potentially even move into negative territory in the long term. Now the most recent forecast shows the industry to grow 2.8% in 2021 and 3.6% in 2022, compared to the dismal -9.4% in 2020.
According to industry information from local brokerage firm Simonis Storm Securities for the fishing industry for October 2021, most industry players are currently operating at maximum sustainable yield (MSY) and have reached total allowable levels of catch (TAC) set by the government.
âThis means that the growth of the industry will not come from additional players in the industry who catch more fish, but rather from an increase in value-added activities or processes being established in Namibia. This suggests that existing industrial players should invest in the establishment of factories and processing plants to add value to their fishery products before exporting to foreign markets or selling in the local market, to stimulate indirect growth and job creation in other sectors linked to the fisheries value chain, âthe report reads.
Simonis Storm Securities further said that the additional fishing quotas issued in 2020 reduce the market share of each player in the industry, thereby decreasing profits and increasing the length of time trawlers are idle for each player. Essentially, each player in the industry is exploiting a smaller market share while the market size remains unchanged.
The report further noted that the industry has become a smaller contributor to the Namibian economy since 2009: âWhile 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 added value grows. are not installed locally, thus creating additional jobs along the value chain.
Currently, the industry employs around 15,500 Namibians, of which around 12,000 are employed by the local hake subsector 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 faces some challenges such as increasing signs of climate change as well as potential negative natural events that pose a risk to Namibian fisheries in the future. Another major challenge is the misallocation of quotas / fishing rights in the past. As a result, Simonis Storm Securities said large productive vessels have left the industry and quotas have been distributed to politically connected individuals, leaving some of the smaller rights holders to go into new ventures.
In addition, the Covid-19 regulations, the closure of businesses in the hotel and restaurant industry have resulted in a drop in demand for Namibia’s fish exports. The report adds that the value of fish exports decreased by 35% between April 2020 and November 2020.
Meanwhile, the value of fish exports hit a low in November 2020 and has stabilized somewhat at around N $ 800 billion since April 2021. However, the decline in demand has been recouped within the local hake industry via exports to supermarkets in Europe.
Caption (fishing.jpg): Still in demandâ¦ Fishery products represent 13% of total exports on average since January 2021, making them the second category of export products after commodity export products. Photo: contributed