Fishery terminals
Fishery terminals
Business Model Description
Construct and operate sustainable fishery terminals for large-scale fish cultivation, processing, storage and packaging.
Expected Impact
Improve livelihood prospects for smallholder producers and improve the nutritional situation of women and children.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Nigeria: South West
- Nigeria: South South (Niger Delta)
Sector Classification
Food and Beverage
Development need
About 25.5% of Nigeria’s population lacks adequate and improved nutrition.(1) Similarly, data from the National Bureau of Statistics suggests 26.4% of the population experienced severe food insecurity in 2016.(1) The Sustainable Development Report ranks Nigeria number 48.0 for SDG 2 (Zero Hunger). While performance against this Goal has improved, major challenges persist.(2)
Policy priority
The government intensified efforts to improve agricultural yield, and investments aim to improve agricultural infrastructure.(1) Policy priorities outlined in the Economic Recovery and Growth Plan aim to: increase agricultural GDP (gross domestic product) to NGN 21.0 trillion in 2020 at an average annual growth rate of 6.9%; reduce food imports; and become a key exporter of agricultural products.(3)
Gender inequalities and marginalization issues
Agriculture and trade account for the majority of Nigeria's employment opportunities. Most people in these sectors work informally (92% of those employed in agriculture, and 56% of those employed in trade), and so rely on daily wages. Generally, informal workers have no pension or life insurance, and have limited health insurance coverage. They are more exposed to shocks, especially to their health, and are vulnerable to poverty and hunger. Micro, small and medium enterprises (MSMEs) are most likely to be affected by the upcoming recession, and will take longer to overcome the economic impacts of COVID-19.(4)
Investment opportunities introduction
The government is also considering strategies such as providing irrigation infrastructure to enable year-round production to boost agricultural productivity.(3)
Key bottlenecks introduction
The Sustainable Development Report ranks Nigeria number 48.0 for SDG 2 (Zero Hunger). While performance against this Goal has improved, major challenges persist.(2)
Food and Agriculture
Development need
In 2018, agriculture accounted for 21.2% of Nigeria's GDP (gross domestic product) and employed two-thirds of the working population.(3) Indicators of adult obesity have improved, while indicators of undernourishment have underperformed. Prevalence of stunting in children is falling.(5)
Agricultural Products
Pipeline Opportunity
Fishery terminals
Construct and operate sustainable fishery terminals for large-scale fish cultivation, processing, storage and packaging.
Business Case
Market Size and Environment
60% of Nigeria's fish demand is covered by imports.
Nigeria has a prominent fish industry, which accounts for 3%-4% of the country's gross domestic product (GDP). Fish consumption constitutes approximately 50% of the population's animal protein intake.(7)
Despite a large potential for both marine and freshwater fish cultivation, imports account for around 60% demand.(7) This gap could be filled by domestic production.
Increased food production (especially rich in proteins) will improve population wellbeing and reduce food insecurity. There’s high demand for fish products (3.3 million metric tonnes), e.g. tilapia, catfish, and mackerel (salmon).(6)
Indicative Return
20% - 25%
Fish farming, if done with expert knowledge and deep market understanding, can generate 20% - 25% returns on investment in Nigeria.(8)
Examples from around the world prove impact-oriented businesses profiting from stock stabilization or restoration can generate returns on equity ranging from 5% to 35%.(9)
Investment Timeframe
Short Term (0–5 years)
The investment timeline for lake fish farming is 3-4.5 years.(10)
The investment recovery period varies from 1 year to 4 years, depending on the size and type of investment - revitalize old fishery terminals and/or build new terminals.(11)
Ticket Size
USD 1 million - USD 10 million
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Capital - Limited Investor Interest
Market - Geographic conditions
Impact Case
Sustainable Development Need
Nigeria has a 2.2 million metric tonne demand gap for fish, which is largely covered by imports.(6)
Nigeria’s population is growing at a steady rate of 2.6% annually (16), and is projected to reach 262 million people by 2030.(17) This will call for increased food production to satisfy increased protein demand.
Aquaculture is also an attractive sector for policymakers because it employs 8.6 million people directly and a further 19.6 million people indirectly.(18)
Gender & Marginalisation
Nigerian women play a predominant role as hired workers in semi-intensive operations, accounting for 70% of workers involved in aquaculture processing.(18)
Sustainable investments in the sector will support job creation among youth, females, increased household income, improved nutrition and reduced child mortality.
Expected Development Outcome
Investments will help improve food security, increase protein intake and decrease food waste.
Investments in this IOA will also help increase the aggregate income of fishers and fishing communities, empower fishing communities and fishers, improve fishing community resilience and close infrastructure gaps.
Gender & Marginalisation
Investments will improve labour conditions of workers, especially women and youth.
Primary SDGs addressed
1.2.2 Proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions
42.2% in 2017. (29)
21.1% by 2030. (29)
2.2.2 Prevalence of malnutrition (weight for height >+2 or <-2 standard deviation from the median of the WHO Child Growth Standards) among children under 5 years of age, by type (wasting and overweight)
2.4.1 Proportion of agricultural area under productive and sustainable agriculture
16.4% in 2015. (30)
56.6% in 2015. (30)
Derived ERGP (Economic Recovery and Growth Plan) target by 2020: 10.9, by 2030: 0. (30)
Derived ERGP (Economic Recovery and Growth Plan) target by 2020:71.1%, by 2030: 100%. (30)
3.2.1 Under‑5 mortality rate
3.2.2 Neonatal mortality rate
132 (29)
36 per 1,000 births (32)
By 2030, end preventable deaths of newborns and children under 5 years of age, with all countries aiming to reduce neonatal mortality to at least as low as 12 per 1,000 live births and under-5 mortality to at least as low as 25 per 1,000 live births. (29)
The long term objective for this indicator is a value of 1.1. (32)
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Outcome Risks
Fishery production may lead to pollution in aquatic environments and habitat degradation.
Investments may lead to negative implications caused by human factors such as overfishing, environmental activities, climate change, population increases and ghost fishing.
Impact Risks
Unexpected impact risk given the negative habitat effects of overfishing, which may endanger life below water.
Alignment risk given production may not be locked into an enterprise model.
Stakeholder participation risk given increasing scale may threaten livelihoods by smallholder fishery producers.
Impact Classification
What
Creation of fishery terminals is likely to have a positive impact by increasing the value of the fish supply chain, increasing fishers' incomes (including females) and creating new workplaces for vulnerable groups.
Risk
Although the model is market proven, the environmental factors, overfishing and resistance from artisanal fishers can pose a risk for the model scaling.
Impact Thesis
Improve livelihood prospects for smallholder producers and improve the nutritional situation of women and children.
Enabling Environment
Policy Environment
National Agriculture Policy: Fisheries are a key pillar of the Nigerian food sector. The National Agriculture Policy recognizes fish as one of the major protein sources in people's diets, and outlines an approach to achieving domestic production sufficiency to minimize imports.(19)
Nigeria's Minister of Agriculture and Rural Development Sabo Nanono said Nigeria may stop fish imports by 2022. He stated it was time for Nigeria to tap into the huge potential of fisheries and aquaculture for local consumption and export.(19)
Since 2000, the Nigerian Government has recognized the importance of fisheries by carrying out related programmes and projects to train and equip farmers with necessary knowledge and resources for fish farming.(20)
Financial Environment
Fiscal incentives: A 30% tax concession is available for 5 years to industries that attain a minimum 80% of local raw materials utilization in agribusiness. A 5% tax concession for 5 years depends on the number of employees.(27)
Other incentives: A 10% tax concession is available for 5 years to industries that export not less than 6% of their products. (27)
Regulatory Environment
Sea Fisheries Act of 1971: This Act makes provisions to control, regulate, and protect marine fisheries in Nigeria's territorial waters.(21)
Sea Fisheries (Licensing) Regulations of 1971 and 1972: These regulations contain provisions on licensing motor fishing boats (22) and restrict fishing trawlers from operating within the first 2 nautical miles of the continental shelf.(23)
Exclusive Economic Zone Decree of 1978: This decree empowers Nigeria to extend its territorial waters by an additional 200 nautical miles seaward from the coast.(24)
Sea Fisheries Decree of 1992: This decree covers licensing of motor fishing boats, penalties for unlicensed motor fishing boats enjoying the rights of licensed boats, powers and duties of licensing officers, and penalties for violating the provisions. It replaces the 1971 Sea Fisheries Act.(25)
1995 Sea Fisheries Regulations: These regulations supplement the Sea Fisheries Decree 1992. In particular, the "Fish Inspection and Quality Assurance" section concerns the control of fishery products.(26)
Marketplace Participants
Private Sector
Nigeria Farmer's Group, Cephas Agricultural Management, Aqua-Agro Farmers, A.S.A. Farms, Tunraven Resources Ltd, Happy Home Foods and Products Ltd, Goatti, Group Farma, Farmkart, Pay Farmer
Government
Federal Ministry of Agriculture, Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Central Bank of Nigeria
Multilaterals
Food and Agriculture Organization of the United Nations (FAO), International Fund for Agricultural Development, Cultivating New Frontiers in Agriculture (CNFA), African Development Bank (AfDB)
Non-Profit
Acumen Fund
Public-Private Partnership
Africa Agriculture and Trade Investment Fund (AATIF)
Target Locations
Nigeria: South West
Nigeria: South South (Niger Delta)
References
- (1) Federal Republic of Nigeria (2017). Implementation of the SDGs: a national voluntary review. https://sustainabledevelopment.un.org/content/documents/16029Nigeria.pdf
- (2) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G. (2019). Sustainable Development Report 2019. New York: Bertelsmann Stiftung and Sustainable Development Solutions Network (SDSN).
- (3) Federal Republic of Nigeria (2017). Economic Recovery and Growth Plan 2017 - 2020. Abuja: Ministry of Budget and National Planning.
- (4) Dalberg (2020). Charting the future for Africa's largest economy: Economic impact of COVID-19 in Nigeria. https://dalberg.com/wp-content/uploads/2020/04/FINAL_Dalberg-Report-Charting-the-Future-of-Africa%E2%80%99s-Largest-Economy.pdf
- (5) Federal Republic of Nigeria (2011). Agricultural Transformation Agenda 2011.
- (6) The Embassy of the Kingdom of the Netherlands, Lagos Office (2019). Aquaculture in Nigeria Factsheet 2019. https://www.agroberichtenbuitenland.nl/binaries/agroberichtenbuitenland/documenten/publicaties/2019/01/23/factsheet-aquaculture-in-nigeria/Aquaculture+in+Nigeria.pdf
- (7) Food and Agriculture Organization of the United Nations (2020). FAO in Nigeria. http://www.fao.org/nigeria/fao-in-nigeria/nigeria-at-a-glance/en/
- (8) Farm Republic. Fish Farming and Its Revenue Potentials in Nigeria. https://www.farmrepublic.ng/fish-farming-and-its-revenue-potentials-in-nigeria/
- (9) Encourage Capital (2016). Investing for Sustainable Global Fisheries. http://investinvibrantoceans.org/wp-content/uploads/documents/FULL-REPORT_FINAL_1-11-16.pdf
- (10) African Green Revolution Forum (2020). The Agribusiness Deal Room at the 2019 African Green Revolution Forum (AGRF). https://agrf.org/dealroom/wp-content/uploads/2020/07/Agribusiness-Deal_Room-AGRF-booklet_020919.pdf
- (11) Escobedo Rupay, J. and Castellares Fernandez, M. (2013). Plan de negocio “Comercialización de jurel y caballa en Lima Metropolitana”, https://repositorioacademico.upc.edu.pe/bitstream/handle/10757/316209/escobedo_rj-rest_.pdf?sequence=2&isAllowed=y
- (12) The Guardian (2020). FG pledges to revitalise two fishing terminals in Akwa Ibom. https://guardian.ng/news/fg-pledges-to-revitalise-two-fishing-terminals-in-akwa-ibom/
- (13) Transportation Research Board and National Research Council (2003). '5 Biological Effects of Oil Releases.', in Oil in the Sea III: Inputs, Fates, and Effects. Washington, DC: The National Academies Press. doi: 10.17226/10388.
- (14) The Guardian (2020). FG pledges to revitalise two fishing terminals in Akwa Ibom. https://guardian.ng/news/fg-pledges-to-revitalise-two-fishing-terminals-in-akwa-ibom/
- (15) Oluwatobi, A.A., Mutalib, H.A., Adeniyi, T.K., Olabode, J.O. and Adeyemi, A. (2017). 'Possible Aquaculture Development in Nigeria: Evidence for Commercial Prospects'. Journal of Agricultural Science and Technology, B7, 194-205. https://pdfs.semanticscholar.org/fc46/3f86f68cd7995fcfedbb4a6619d2691980e1.pdf?_ga=2.44318572.931950668.1594200969-181587615.1594200969
- (16) World Bank Database.
- (17) Inter-Agency Regional Analysts Network (2016). Nigeria Trend Analysis: Challenges and Opportunities of the Demographic Shift and Its Link to Stunting An Outlook To 2030. https://www.iris-france.org/wp-content/uploads/2016/09/NGA-Trend-Analysis-Demography-Stunting.pdf
- (18) WorldFish (2018). WorldFish Nigeria Strategy 2018–2022. https://digitalarchive.worldfishcenter.org/handle/20.500.12348/673
- (19) Federal Ministry of Agricultural and Rural Development. Agricultural Policy for Nigeria. http://extwprlegs1.fao.org/docs/pdf/nig149296.pdf
- (20) Farm Republic. Fish Farming and Its Revenue Potentials in Nigeria. https://www.farmrepublic.ng/fish-farming-and-its-revenue-potentials-in-nigeria/
- (21) Sea Fisheries Act. http://extwprlegs1.fao.org/docs/pdf/nig5318.pdf
- (22) Sea Fisheries (Licensing) Regulations 1971. http://www.fao.org/faolex/results/details/en/c/LEX-FAOC005324/
- (23) Sea Fisheries (Fishing) Regulations 1972. http://extwprlegs1.fao.org/docs/pdf/nig5321.pdf
- (24) United Nations (1978). Exclusive Economic Zone Decree No. 28 of 5 October 1978. https://www.un.org/Depts/los/LEGISLATIONANDTREATIES/PDFFILES/NGA_1978_Decree.pdf
- (25) Sea Fisheries Decree no. 17 of 1992. https://sherloc.unodc.org/cld/uploads/res/document/sea-fisheries-decree-1992_html/Sea_Fisheries_Decree.pdf
- (26) Sea Fisheries (Fish Inspection And Quality Assurance) Regulations 1995. http://extwprlegs1.fao.org/docs/pdf/nig120902.pdf
- (27) Federal Republic of Nigeria (2021). Investment Incentives in Nigeria. http://www.nigeriaembassyusa.org/index.php?page=investment-incentives
- (28) Logistics Update Africa (2020). Nigerian government to reactivate two dilapidated fishing terminals in Akwa Ibom. https://www.logupdateafrica.com/nigerian-government-to-reactivate-two-dilapidated-fishing-terminals-in-akwa-ibom-shipping
- (29) Federal Republic of Nigeria (2020). Integration of the SDGs into National Development Planning: A Second Voluntary National Review (2020). https://sustainabledevelopment.un.org/content/documents/26309VNR_2020_Nigeria_Report.pdf
- (30) Federal Republic of Nigeria (2017). Implementation of the SDGs: a national voluntary review. https://sustainabledevelopment.un.org/content/documents/16029Nigeria.pdf
- (31) UNDP, Human Development Report (2020). Available at: https://www.ng.undp.org/content/nigeria/en/home/library/human_development/the-2020-human-development-report.html
- (32) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G., Woelm, F (2020). The Sustainable Development Goals and COVID-19. Sustainable Development Report 2020. Cambridge: Cambridge University Press. https://dashboards.sdgindex.org/profiles/NGA