Friday, August 14, 2015 09:22AM / FBN Capital Research
One of the fastest growing segments of the agriculture sector is fisheries. CBN data show fish imports of US$370m in January-May this year.
Nigeria has been the largest importer of fish and fisheries products in sub-Saharan Africa, with an annual import bill of N125bn (US$630m) to meet the domestic shortage estimated at 1.3 million metric tonnes (mmt).
In June the CBN changed the structure and economics of the fisheries segment with its circular ruling that 41 imported goods were no longer eligible for fx from either the interbank market or the bureaux de change: the list includes tinned fish in sauce/sardines, and fish.
The fisheries segment grew by 7% y/y in Q1 2015 and represented 3% of agriculture GDP.
The CBN's latest External Sector Development Report reveals that in Q1 2015 food products accounted for 16.8% of fx utilisation for visible imports.
Recently, the Catfish Farmers’ Association of Nigeria announced plans to begin production of canned catfish in partnership with the National Institute of Oceanography and Marine Research, and the Forum for Agricultural Research in Africa. This canning project supports the FGN’s import substitution strategy.
Nigeria is Norway’s largest market for air-dried cod (stockfish), with trade estimated at US$58m annually.
However, the CBN circular has led to a significant drop in these imports. Businesses can still use fx sourced from the parallel market to import stockfish, albeit at a premium.
The fisheries segment operates with inadequate fishing terminals as well as more general constraints: irregular supplies of power and fuel, poor transport networks and inadequate access to credit, to name but a few.
These issues must be addressed if the segment is to reach its potential in terms of local production, job creation and expansion of the fisheries value-chain.