This second volume of the study on the “Promotion of sustainable commercial aquaculture in sub-Saharan Africa” was prepared within the framework of the FAO Fisheries Department’s continued efforts to contribute, through sustainable development of commercial aquaculture, to poverty alleviation and eradication of hunger in developing countries, especially in sub-Saharan Africa. Its specific goal is to assist developing member countries in the development and implementation of policies that encourage the emergence or expansion of entrepreneurship in aquaculture for a sustainable development of this sector. The report focuses on one of the major impediments to aquaculture development in sub-Saharan Africa, namely the difficulty of entrepreneurs gaining access to capital, particularly in rural parts of the region. Other constraints to development are discussed in Volumes 1, 3 and 4 of this study.
Information reported in this document was obtained through wide-ranging studies covering socio-economic, marketing, policy, legal, regulatory and institutional aspects of commercial aquaculture which were commissioned in Côte d’Ivoire, Madagascar, Malawi, Mozambique, Nigeria, Zambia, Costa Rica and Honduras. Available literature on the access to credit in other countries, especially developing nations, was extensively used.
Distribution:
FAO Members
Other interested nations and national and international organizations
FAO Fisheries Department
FAO Regional and Subregional offices
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Hishamunda, N.; Manning, P. Promotion of sustainable commercial aquaculture in sub-Saharan Africa. Volume 2: Investment and economic feasibility. FAO Fisheries Technical Paper. No. 408/2. Rome, FAO. 2002. 54p. ABSTRACT This volume of the report on the promotion of sustainable commercial aquaculture in sub-Saharan Africa discusses the difficult access to investment capital, one of the major obstacles to the development of sustainable commercial aquaculture in the region. The problem arises from a lack of collateral, excessively high interest rates on loans, bankers’ perceptions that aquaculture carries a particularly high risk of failure, a lack of knowledge, by farmers, of the modalities of applying for loans and, on the part of lenders, a lack of or limited information on, commercially successful aquaculture enterprises in the region. While some of the lenders’ perceptions are valid - particularly in instances where the industry is not yet established and difficulties could occur as a result of local unavailability of necessary inputs, the market is untested and there are no examples of commercial success that could offer an indication of viability - preliminary evidence seems to indicate that banks tend to exaggerate the likelihood of failure of commercial aquaculture projects in sub-Saharan Africa. Borrowers need to be able to formulate and present their business proposals in a precise and concise manner that effectively offers the lender a comprehensive picture of the proposed business, communicates how they expect to profit from the proposed enterprises and generate the funds for the repayment of the loans sought. The problem of collateral could be tackled through the use of “no-collateral” strategies such as group lending, village banks and solidarity groups, alternative collaterals such as titled land and moveable property, which in many cases bespeaks the need for legal and regulatory reforms, and through government loan guarantees. When affordable, government loan guarantees and subsidized interest rates could also be used to lessen the problem of high interest rates. |
