The Ministry of Fisheries and Marine Resources is proposing a marine aquaculture business development and investment promotion agency at the cost of N$12 million to create a dedicated aquaculture investment fund to improve financing for marine aquaculture.
The aquaculture master plan, released last week, will guide the launching phase and will come to and end in 2023. The mater plan is intended to begin with several time-strained approaches to achieve growth in a limited window of opportunity by encouraging investment prospects for existing enterprises while also developing a small number of new high-risk opportunities such as oyster production.
To achieve the full 2017 marine aquaculture development goals, another N$250 million is needed to establish an aquaculture development fund. The master plans suggests that the fund offers a combination of equity investment and debt instruments. The administration costs to set up the fund are estimated at N$5 million.
“A typical new venture at a modest level of gearing might be financed by 50% equity and 50% loans” the master plan states adding that the interest repayments associated can lead to business collapse.
Marine aquaculture production is expected to increase from the current 525 tonnes to 55000 tonnes by 2023 through an intervention strategy led by the government with industry support. “The success of the project relies on mutual partnerships between the public and private sectors and civil society organisations” the master plan states.
The Minister of Fisheries and Marine Resources, Hon Bernard Esau launched the plan last week in Ongwediva.
The master plan proposes a marine aquaculture business development and investment agency which will be instructed to develop, support and promote marine aquaculture ventures along the coastline ensuring the growth and sustainability of the aquaculture ventures in coordination and collaboration with local and global partners.
The agency will be responsible for the full investment promotion cycle, from the formulation of business proposals to locating potential investors and the sourcing of funds. The agency will also be responsible for the financial and technical conditions of the projects working closely with the involved entrepreneurs.
The master plan assumes that oyster production can be expanded to an estimated 750 tons by 2018 and a further 2000 tons by 2023.
According to the master plan, “the production of oyster would require an investment of N$14,7 million for the first two years with return on investment and return on equity estimated at 36 % once the business is at full production.”
Total financing of N$22.3 million is needed over the three years before production stabilises at 500 tonnes per year generating sales estimated at N$35.7 million per year.
Although the marine aquaculture industry has the potential to grow and create jobs and improve poverty in the coastal areas, the master plan for marine aquaculture suggests major changes are needed in the industry at large. Future growth of marine aquaculture will involve the adoption of new recirculation aquaculture technologies which could break due to water shortages and will also need sizeable investments.
Cognizant of the risks, the master plan states that the costs for the testing period may be high but adds that risks can be managed for significant financial and socio-economic returns. Policy interventions are planned to streamline legislation.
Bureaucratic hurdles must be kept to a minimum, for instance, it is envisaged that the period from application to approval of marine aquaculture licenses, must not exceed 90 days. The same will apply to quarantine applications for the introduction of new species.