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Ghana Priorities: Fisheries

The Problem

Fish is an important source of animal protein in developing coastal countries, including Ghana. Within the West African region, fish protein constitutes about one-third of animal protein, which is more than twice the global average and just slightly more than on-half of Ghana’s average. The fisheries sector employs and sustains the livelihoods of a significant number of the active labour force, including women who play key roles in the post-harvest value-chain creation. In Ghana, at least 3 million people, including half a million women, are working within the capture fisheries sector. In addition, within the country, the sector makes up about 15% of the annual total agricultural output (i.e., agricultural GDP). 

The capture artisanal marine fisheries sector, which is one of the four marine fisheries sectors in Ghana, is by far the leading fisheries sector contributing over three-quarters of the total marine fish landings and about a third of total domestic landings. Yet, the sector has too many canoes. The fishing capacity is in excess of approximately 40%, implying a significant number of canoes must be decommissioned to maximise resource rent or profit. The excess capacity is worsened by Illegal, Unreported and Unregulated (IUU) fishing activities, including the use of destructive fishing gears by both artisanal and industrial fleets to improve catch efficiency. As shown in Fig. 1, beginning 1992 both the catch per canoe and fishermen have been declining rapidly overtime.  

The main targeted species of the artisanal fishermen are sardines, anchovies, and mackerel, commonly known as ‘the people’s fish’ owing to their contribution to animal protein in many households. The dominant IUU fishing among the artisanal fishers is the use of nets with very small mesh sizes. On the other hand, industrial trawl vessels that are licensed to fish in distant waters and target ‘demersal species’ that live on, or close to the bottom of the sea rather, illegally, target small pelagic species, freeze them into pellets and transship them at sea to middlemen. Currently, due to the biological overfishing, coupled with low aquaculture production, only 40% of the fish consumed in Ghana is produced locally.

In this study, three policy interventions have been proposed and analysed using a social benefit cost analysis to address the overfishing problem. These include replacement of illegal/destructive fishing nets, limiting the number of fishing boats while providing training and subsidizing feed for aquaculture, and installing video devices in the trawl vessels to regulate their illegal fishing activities. These interventions are supposed to be implemented by the government through the Ministry of Fisheries and Aquaculture Development (MoFAD). 

Interventions

Replacement of illegal/destructive fishing nets

Nine in every ten artisanal marine fishermen in Ghana use illegal mesh sizes (Akpalu, 2007), some of which are as so small as 10mm in stretched diagonal to improve the efficiency of the fishing gear. Despite a clearly laid out penalty for violating the regulation, compliance rate is very low owing to inadequate enforcement. A plausible intervention is to replace all the illegal fishing nets with legal ones. In the short term, when the nets are replaced, harvest will reduce by 28% on average (Akpalu, 2008). However, since the stocks targeted are fast growing pelagic species, within a year, the average size of fish caught will be bigger, hence more valuable.  

The cost elements of the intervention are: 

• the cost of the new (approved) nets – GHS 165 million, 
• expenditure on sensitizing the fishermen about the benefits of the policy – GHS 0.5 million and, 
• the opportunity cost of lost rents to the fishermen within the first year GHS 101 million. 

The corresponding benefit is the increased revenue from selling mature and valuable fish, which is more than twice the price of juveniles. This is worth GHS 189 million per year. Using a central discount rate of 8%, over a 10-year period, the intervention will generate approximately 5 times the social benefit over cost. 

Limiting the number of canoes while providing training and subsidizing feed for aquaculture

Profit in the marine capture fisheries is much lower than what it ought to be owing to excess capacity in the fishery. To maximize profit or resource rents, the number of canoes must be reduced to the level corresponding to the maximum economic yield (MEY). Doing so will increase rents for the remaining boats by GHS 107 million per year. However, this will lead to 40,000 jobs lost, with a corresponding loss of income equal to GHS 66 million per year.

The fishermen who will lose their jobs, as a result, will have to be incentivized to take up fish farming in ponds and cages. Since capture fishermen are often reluctant to shift to other economic activities, this intervention will come at a social and political cost, which must be accounted for. We surmise that an incentive compatible scheme equivalent to the forgone income of the displaced fishermen must be provided as part of this intervention (GHS 66 million). 

It is expected that a fish farmer will start with one pond for the first two years, then progress to 2 ponds in the third and fourth year, then finally to 3 ponds in the fifth and sixth year. Since, on average, fish farming only becomes meaningfully profitable when the farmer has at least 3 ponds, within the first four years, the farmers will be supported. In the first two years they will be provided interest free loans and fish feed subsidy. In the third and fourth year, only feed subsidy will be required. After the fourth year, the project becomes profitable and will not require any further assistance. The benefit is the stock build up and the corresponding increase in rents in the captured fisheries sector.

Installing video devices in the trawl vessels

Like the artisanal fishery, industrial trawl vessels operating within Ghana’s exclusive economic zone are too many. On average they lose about 52% of their potential rents/profits annually. In addition, the trawlers illegally target small pelagic species, freeze them into pellets, and transship them to boats operated by middlemen who in turn retail them to fish processors in fishing communities along the coast. The illegal practice, which is commonly known as saiko, is accelerating the depletion of pelagic stocks. Saiko fish is poor quality and does not compete with the fresh fish landed by artisanal boats. This intervention entails installing a video device ‘FishEye of Trident’ on each vessel, which will be monitored. The cost of the intervention is 12m up front in cameras with ongoing annual costs of 11m for monitoring staff.

It is estimated that artisanal profits could increase by almost three-quarters owing to the intervention. These are valued at 260m per year. Using a central discount rate of 8%, it has been found that installing video devices on trawl vessels generates the highest return. The BCR indicates that the benefit accruing to planting a video device could be more than 20 times the associated cost, all else equal.