Promotion of Sustainable Commercial Aquaculture in Sub-Saharan Africa - Volume 2: Investment and Economic Feasibility

FAO
FISHERIES
TECHNICAL
PAPER
408/2

by
Nathanael Hishamunda
Fishery Planning Analyst
Fishery Policy and Planning Division
FAO Fisheries Department
and
Peter Manning
Consultant

FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS
Rome, 2002

Table of Contents

FAO/20044 - Photo by H. Zhang
FAO/18558 - Photo by R. Faidutti
FAO/13504 - Photo by I. De Borhegyi
Shrimp drawn by Juan Varela

The designations employed and the presentation of the material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

ISBN 92-5-104833-9

All rights reserved. Reproduction and dissemination of material in this information product for educational or other non-commercial purposes are authorized without any prior written permission from the copyright holders provided the source is fully acknowledged. Reproduction of material in this information product for resale or other commercial purposes is prohibited without written permission of the copyright holders. Application for such permission should be addressed to the Chief, Publishing Management Service, Information division, FAO, Viale delle Terme di Caracalla, 00100 Rome, Italy or by e-mail to copyright@fao.org

© FAO 2002

Table of Contents

PREPARATION OF THIS DOCUMENT

FOREWORD

CHAPTER 1. INTRODUCTION

1.1 Background
1.2 Methodology
1.3 About this volume

CHAPTER 2. CAPITAL IN COMMERCIAL AQUACULTURE VENTURES IN SUB-SAHARAN AFRICA

2.1 The concept of capital in commercial aquaculture
2.2 Source of capital for commercial aquaculture development: the role and issue of loans
2.3 The types and sources of loans in commercial aquaculture

2.3.1 Types of loans
2.3.2 Sources of loans

2.4 Access to bank loans for commercial aquaculture development in sub-Saharan Africa

2.4.1 Fundamental requirements for obtaining a bank loan
2.4.2 Most limiting factors to bank loans in commercial aquaculture in sub-Saharan Africa
Summary and conclusions

CHAPTER 3. RISKS IN COMMERCIAL AQUACULTURE VENTURES: ECONOMIC FEASIBILITY

3.1 Setting
3.2 Description of farms analysed

3.2.1 Shrimp farms
3.2.2 Fish farms

3.3 Results of economic analysis

3.3.1 Farm profitability
3.3.2 Cost structure analysis
3.3.3 Break-even and sensitivity analyses
Summary and conclusions

CHAPTER 4. TACKLING THE ISSUES OF COLLATERAL AND HIGH INTEREST RATES

4.1 Alleviating the lack of collateral

4.1.1 “No-collateral” approaches: promotion of group lending
4.1.2 Extension of the possibilities for securing loans
4.1.3 Government loan guarantees

4.2 Lessening the problem of high interest rates

4.2.1 Addressing factors influencing interest rates
4.2.2 Some other options
Summary and conclusions

CHAPTER 5. THE PROBLEM OF LACK OF KNOWLEDGE IN LOAN SEEKING: BUSINESS PLANS

5.1 Role and definition of a business plan
5.2 Essential elements of a business plan for a commercial aquaculture venture

5.2.1 Title page, table of contents and executive summary
5.2.2 The main body

5.3 Presentation of the business plan

Summary and conclusions

CHAPTER 6. OVERALL SUMMARY AND CONCLUSIONS

BIBLIOGRAPHY

APPENDIX: Checklist for the elements of a business plan

BACK COVER