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Boosting Local Fish Production

Agriculture	3490 VIEWS
Agriculture
3490 VIEWS

Friday, November 24, 2017 10:23AM /FBNQuest Research

Today we turn our attention to the fisheries sector. Aquaculture remains an integral part of Nigeria’s agriculture sector, with annual fish demand estimated at 3.3 million metric tons (mmt). Over the past two years, domestic fish supply has risen by 71% to 1.2mmt. We attribute the pick-up to increased government intervention. However, there remains a supply gap of 64%, which points towards investment opportunities.

Based on the recently released national accounts, fisheries contracted by -2.8% in Q3 and accounted for just 1.5% of total agricultural GDP. There has been a steady decline in output since the start of the year, according to the same report: the segment generated N135bn in Q3 compared with N138bn in Q2 and N171bn in Q1.

The fisheries industry faces numerous challenges. However, the high cost of fish feed continues to stick out as a major issue. We understand that the price of fish feed has surged by 67% y/y to N7, 500 per bag.

Olam, a multinational agribusiness firm, has recently set up a fish feed manufacturing facility in Kwara State. The initial milling capacity is 75,000 tons per year.

Logistics issues also require immediate attention to push the segment forward. Improved road networks to farms (including fish farms) would assist with boosting the value chain.

The EU has set up a €50m fund to encourage sustainable fisheries development and marine security across ECOWAS (Nigeria inclusive). The EU estimates the annual commercial value from fisheries at US$3bn from the sub-region.