Aquaculture in need of a leg-up
The FGN has rolled out several reforms for the agriculture sector over the past 24 months, some of which have been geared towards the fisheries industry. There has been a pick-up in local fish supply; the FGN said in Q2 2017 that production was 71% higher at 1.2 million metric tons (mmt). Nigeria’s annual fish demand is estimated at 3.3mmt, only 36% of which is supplied domestically. In 2015 the fish import bill was US$700m.
· The FGN has been steadily reducing fish importation quotas and may now halt them in the name of backward integration. The annual fish import baseline set in 2015 was 500,000mt.
· The improved production figures reported by the federal ministry of agriculture and rural development do not sit comfortably with the recent output figures released by the NBS.
· The latest GDP figures (Q2 2017) show that fisheries accounted for just 2% of total agriculture GDP and contracted by -2.7% y/y. We suspect that poor access to finance continues to constrain the fish farmers, resulting in difficulty in boosting output.
· The high cost of fish feed has been cited as a core reason for low aquaculture yields. We gather that fish feed accounts for c.75% of the total cost of production. Perhaps the reforms within the fertiliser industry will assist with pulling fish feed prices downwards as most farmers attribute the high cost of fish feeds to fertiliser costs.
· To encourage increased local fish production, the FGN has announced plans to train 500 youths in aquaculture next year. Although this is commendable, the segment would also benefit largely from increased financial intervention vehicles. The CBN has set up a few, however, these have had minimal effect on the fisheries segment.