(i) GENERAL POLICY FRAMEWORK
(ii) MITIGATING STRATEGIES TO MAJOR CONSTRAINTS TO SUSTAINABLE COMMERCIAL AQUACULTURE IN SUB-SAHARAN AFRICA
20. Policies for the promotion of sustainable commercial aquaculture were presented by the Secretariat on the basis of Document FI: SCA/2001/4. It was pointed out that the enabling policies are the most critical factor in the promotion and expansion of commercial aquaculture. They are a means of increasing trust among investors by reducing risks and costs.
21. The Consultation noted that enabling policies can be general in scope, or oriented specifically to the aquaculture sector. General policies include improved governance, measures to ensure political and policy stability, secure property rights, reduced corruption, among others. Sectoral policies can be defined at the overall level or at the level of the farm. Overall sectoral policies include appropriate legal and regulatory and administrative frameworks, marketing strategies and encouraging pioneer associations. At the level of the farm, policies to promote commercial aquaculture could be attracting foreign investment in aquaculture, influencing the price and quantity of inputs, or providing start-up funding.
22. The Consultation concurred with the view that sound enabling government policies, whether sector specific or not, are critical factors for commercial aquaculture to take off and/or develop and noted that political and policy stability is of particular concern for investors in sub-Saharan Africa.
23. There was a general agreement that effective extension services are necessary to support the emergence and development of commercial aquaculture. Thus, delegates noted the need for capacity building, education and training in the Region.
24. The Consultation further noted the need for Governments to progressively disengage in production activities such as the management of aquaculture farms and hatcheries. Delegates re-iterated that governments’ role in commercial aquaculture development should be to put in place appropriate aquaculture specific policies, legislation and regulations.
25. Delegates unanimously agreed that the lack of capital is one of the important constraints to commercial aquaculture development in sub-Saharan Africa. A number of Delegates illustrated how economic policies, aimed at facilitating aquaculture development, have boosted investment in the sector by increasing loan availability for this activity. 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 other countries, where possible.
26. Delegates noted the importance of institutional factors in facilitating or hampering the emergence and/or development of commercial aquaculture. They expressed concern about structural adjustment programmes to which most governments in sub-Saharan Africa are subjected, which limit the extent of government support, in particular financial support, may delay institutional strengthening necessary for aquaculture development.
27. Delegates also noted that in many instances aquaculture comes under more than one department. The institution responsible for aquaculture development therefore faces difficulties in ensuring co-ordination with other government departments which are competent in investment related matters, food production and natural resources management. Consequently, the institution responsible for aquaculture, has difficulties in co-ordinating the sector. In relation to this concern, participants recognised the utmost importance of stakeholders’ involvement at any level of the policy-making process. Producers associations could indeed play a critical advisory role.
28. The Consultation emphasised the need for land tenure reforms in many countries that would define more clearly land rights and titles to land ownership in stimulating private investment. It was acknowledged that appropriate land laws can play a crucial role in facilitating the emergence and/or development of commercial aquaculture. The nature of the lease, its duration, the exclusive nature of the right are factors likely to encourage or discourage development. The Consultation noted that a few countries are in the process of reviewing their legislation governing aquaculture while others have just adopted a new legislation specifically for aquaculture in general or for a particular aquaculture activity.
29. The Consultation further noted that aquaculture specific legislation provides the government with a legal basis for implementing aquaculture policies, streamlining the aquaculture development process and controlling the environmental dimensions of aquaculture operations. Difficulties lay often in how to establish a legal framework conducive to aquaculture. Such difficulties may be reduced or overcome when a legal framework is prepared with the involvement of stakeholders from the private sector, including financial institutions, communities, and farmers.
30. The Consultation made the following suggestions with respect to the assistance that FAO could provide in promoting commercial aquaculture in sub-Saharan Africa, at both national and regional levels:
31. Related to the latter suggestion, the Consultation stressed that capital is important to start-up and run an aquaculture facility. However, it was also noted that, for several reasons, financial institutions, whether national or international, are reluctant to provide loans for commercial aquaculture. Thus, the Consultation noted the need for FAO to organise a meeting inviting financial institutions, donors and other potential investors to create awareness of successful aquaculture experiences in Africa, thereby increasing and/or restoring trust among financial institutions.
32. In presenting Document FI:SCA/2001/5, the Secretariat highlighted one major constraint to commercial aquaculture, namely the difficult access to capital and related problems such as the frequent lack of collateral, high interest rates, the perception that investments in aquaculture is highly risky and the lack of knowledge on the part of potential borrowers on how to apply for loans. This situation is often exacerbated by lack of track records on part of the borrowers.
33. In the ensuing discussion, there was consensus that lack of capital is hampering development of commercial aquaculture and that loan conditions offered to aquaculture entrepreneurs are too restrictive to permit any substantial growth of the sector in the region. Several delegates suggested that special financing mechanisms should be established in support of aquaculture development including loan insurance schemes. Some delegates also pointed out that in rural areas in many countries, the absence of financial institutions providing loans and banking services hinders the expansion of even rudimentary aquaculture initiatives.
34. The Consultation acknowledged that the use of soft loans and loan guarantees could be an important instrument in aquaculture development; several delegates referred to relevant development experiences in the Asian region. However, it was underlined that any initiative of this kind must be in line with the rules of international institutions such as the World Trade Organization (WTO).
35. The Consultation noted a clear role for FAO, as a catalyst for change, for the provision of technical expertise, capacity building on loan related issues and as an organization that could bring together the different stakeholder such as investors, financial institutions, technical expertise and governments.
36. The Consultation also highlighted the role FAO could play in increasing the capability of national governments in mapping the potential of aquaculture, in the provision of more precise statistical data relevant to the sector and in enabling foreign and domestic investment in commercial aquaculture.
