Somali fisheries, investment opportunity

Somali Fisheries

Investment Opportunity

Boats docked on the shores of the Indian Ocean in Mogadishu.

The Somali Fisheries sector is widely acknowledged to have huge potential for profitable expansion, against a backdrop of increasing world demand and peak production in most of the world’s fisheries. Somalia boasts Africa’s longest coastline, although the sector largely remains a small livelihood-based activity. Considerable foreign investment was made, and was successful, prior to the civil war and unrest in the 1990’s. Fishing efforts now remain at a fraction of historic levels, despite Somalia having one of the last untapped fisheries resources available worldwide.

Fisheries in Numbers

The Somali Exclusive Economic Zone (EEZ) of 830,390 km2 was formally ratified in 2014, but has seen minimal international fishing effort for more than two decades.

Estimates suggest that the country has the potential to produce 300,000 to 400,000 tons of fish per year, whilst current landings are estimated at just 15,000 to 20,000 tons. The economic value of the fisheries sector is estimated at US$135 million per year, employing up to 30,000 people; almost entirely engaged at artisanal level.

Much of the coastline is remote and far from major settlements and hence only lightly fished by local fishermen.

Fish consumption in Somalia remains low, although demand is rapidly increasing and outstripping supply in major urban centers. Significant skill shortages and lack of cold chain facilities are the major obstructions to increased local production and consumption of fish. The most significant potential for increased fish production in the Somali EEZ, however, is for offshore species destined for export markets. Investors able to unlock this potential will be able to access highly productive fish stocks and low operating costs, compared with the majority of global fisheries that see declining catch rates and profitability.

3,300km

The Longest in Mainland Africa

Fish catch statisctics (Tonnes/Yr)

30,000 6,000 1950

1994

Source: World Bank & FAO 2003

100,000 18,000 2003

2018

Boats on the shores of the Indian Ocean in Mogadishu.

Why Invest in Somalia?

• Sustainable Management and Regulation: Somalia became an active member of the Indian Ocean Tuna Commission in 2014 and a member of Fish-i-Africa in 2016, providing an environment that can protect legitimate investors and assist with long term sustainability.

• Increased domestic demand: Demand for fish in Somalia’s major urban centers is now outstripping supply.

• Difficulties in cold chain infrastructure and transport has seen a large price differential develop in fresh fish prices between fish landing sites and urban markets, creating a substantial opportunity for investors.

• International Demand: International demand for seafood products continues to increase, when most of the world’s fisheries are either over-exploited or fully exploited. Somalia is uniquely situated to meet rapidly rising demand for fish products, particularly in Ethiopia and the Gulf States • Variety of Fish Available: As can be expected in such a large EEZ, a huge variety of species can be found, many of which are completely untapped. Considerable potential exists for niche fisheries, exploiting high value fish species for export markets, that have yet to be exploited in Somalia. Somali lobster was exported worldwide in the 1980’s, and was one of the most valuable in the world. Shrimp, octopus, crab, a wide variety of tuna species are all known to exist in Somalia but are yet to be exploited.

• The Piracy Legacy: Somalia’s reputation as a haven for piracy is well known: what is less known is the impact this has had on fisheries, which have been largely untouched by international industrial investors for over a decade, seeing fish stocks rebound. The Somali EEZ is probably the most under fished EEZ in the world.

Piracy activity ceased in 2013, although few foreign industrial vessels have returned to take advantage of the virgin fish stocks available.

• Labor costs: Labor costs, particularly in remote coastal communities, remain extremely low. The potential for profitable value added processing to low cost fish species, for international export markets, is considerable.

• Priority Sector: The Federal Government of Somalia, in their recent 2017-2019 National Development have listed fisheries as a priority sector; a driver of economic growth.

What are the Opportunities?

• Landing facility rehabilitation, including major fishing harbor infrastructure, with long term income streams for investors developing and operating this infrastructure.

• Cold chain infrastructure development, to unlock the large price differential seen between fish prices in remote coastal communities where abundant fish stocks are found, and urban areas where demand outstrips supply.

• Supply of renewable energy infrastructure and equipment, against a backdrop of extremely high energy prices.

• Boat building, engine sales and agencies, particularly the supply of semi-industrial fishing vessels, urgently needed to increase Somalia’s fishing capacity.

• Investment in industrial fishing vessels, particularly in the offshore sector, either landing into Somalia for processing and value addition, or directly to foreign markets. Fish meal production, at both niche and industrial levels; significant markets exist already within Somalia for fish meal, as a protein source within animal feed.

• Development of new niche fisheries for high value export markets such as cuttlefish and shrimp, including significant value addition.

• Exploitation of fish species for which there is no domestic demand in Somalia; species such as sardine are in high demand worldwide, but have no domestic market and have not been exploited for over two decades.

Fishing vessels in Mogadishu.