34. In introducing this agenda item, the Secretariat focused on one of the major impediments to the development of sustainable commercial aquaculture in sub-Saharan Africa, namely the difficulty of entrepreneurs gaining access to capital. Like in the rest of sub-Saharan Africa, the problem in Malawi and Zambia appears to arise, in part, from a lack of adequate collateral, prohibitively high interest rates being charged for loans, bankers’ perceptions that commercial aquaculture carries a particularly high risk of failure and a lack of knowledge, on the part of farmers, of the modalities of approaching financial institutions for a loan. The limited knowledge, on the part of lenders, of commercially successful aquaculture enterprises in the two countries has exacerbated the problem.
35. Participants unanimously agreed that the lack of capital is one of the important constraints to commercial aquaculture development in Malawi and Zambia. A number of participants shared experiences on how economic policies, aimed at facilitating aquaculture development, have boosted investment in the sector by increasing loan availability for this activity in other countries. These policies consisted of the creation of special funds for aquaculture research and development, the provision of tax exemptions and tax holidays, management of aquaculture ventures and the creation of free trade zones or export processing zones. They recommended to explore the possibilities of extending the use of these policies in Malawi and Zambia.
36. Stressing the importance of capital in starting-up and running an aquaculture facility, the Workshop noted that, for several reasons, national financial institutions are reluctant to provide loans for aquaculture. Thus, the Workshop emphasized the need for a continued education of funding institutions, donors and potential investors which aims at creating awareness of successful aquaculture experiences in Africa, thereby increasing and/or restoring trust among financial institutions and donors. Building farmers’ capacity in accessing loans and other funds for commercial aquaculture development was also stressed. 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. Participants identified the urgent need for FAO to organize studies in Malawi and Zambia with the aim of identifying all sources of funds and funding mechanisms for commercial aquaculture.
