Sustainable Fishery Terminals and Aquaculture Farms
Sustainable Fishery Terminals and Aquaculture Farms
Business Model Description
Invest in sustainable fish production in aquaculture farms and sustainable fishery terminals for large-scale fish cultivation, processing, storage and packaging.
Expected Impact
Improve food security, address maritime resource challenges, and contribute to national economic growth.
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
- Djibouti: Obock
- Djibouti: Arta
- Djibouti: Djibouti (City)
Sector Classification
Food and Beverage
Development need
Only 10% of Djibouti's demand for fruits and vegetables is domestically produced. The country's agricultural sector is made up of small plots and subsistence farming techniques. Boosting agricultural activity could generate employment and help address the high dependence on imports for food security and rising levels of desertification in rural areas (1).
Policy priority
Among the Government's priorities to diversify the economy is expanding agriculture and fishing activities, with agriculture's contribution to GDP expected to reach 5% by 2035. Other Government plans include the 2009 Master Plan for the Development of the Primary Sector, and the Strategy for Accelerated Growth and Employment Promotion (1, 2).
Gender inequalities and marginalization issues
Coping mechanisms of peasant farmers in Djibouti’s rural regions have been eroded. High food prices and unemployment rates, particularly among the youth and women, affect the country’s urban areas. All these factors have increased vulnerability to food insecurity and spurred migration (6).
Investment opportunities introduction
Providing access to water, conserving soil, diversifying livelihoods of women and fishermen, supporting agricultural, livestock and fisheries production and sensitization and mobilization of beneficiary communities in participatory planning and project implementation can help prevent displacement and strengthen resilience from climate change and droughts (5).
Key bottlenecks introduction
Challenges in the agricultural sector include high food prices and unemployment and increased vulnerability to food insecurity and migration due to successive years of drought and interspersed rain causing flash floods.
Food and Agriculture
Development need
Djibouti's fishing sector is at a subsistence level, conducted from a limited number of small vessels using traditional gear. Sharks are caught with gill nets, which damage coral reefs, and the illegal spear fishing practice is widely spread, which signals the challenges in the efficient and sustainable exploitation of resources (3).
Policy priority
Strategy for Accelerated Growth and Employment Promotion sets an annual target of 20,000 tonnes for sea products, and the Ministry for the Promotion of Women, Family and Social Welfare has established a fish promotion project addressing female fishmongers and informing women on nutrition (1, 3).
Gender inequalities and marginalization issues
Across the continent, women make up at least 60% of those handling fish, buying wholesale to sell at local, regional, and international markets or to process through smoking, deep frying, and drying. Women in Djibouti are hence expected to benefit significantly from the realization of Djibouti's fishing potential (4).
Investment opportunities introduction
Fisheries is evolving as a major sector in Djibouti due to increased foreign direct investment and port activity. Unlike other agricultural sectors, fishery is not substantially affected by Djibouti's climate (3).
Key bottlenecks introduction
The subsector faces challenges with regards to low domestic consumption of fish, shortage of downstream output infrastructure, tidal fall limiting fishers’ outings to sea and access to offshore fishing areas, illegal fishing and lack of control over the shark fishery (3).
Meat, Poultry and Dairy
Pipeline Opportunity
Sustainable Fishery Terminals and Aquaculture Farms
Invest in sustainable fish production in aquaculture farms and sustainable fishery terminals for large-scale fish cultivation, processing, storage and packaging.
Business Case
Market Size and Environment
Total fisheries production of 2,102 metric tons
Djibouti recorded 2,102 metric tons of aquatic species for all commercial, industrial, recreational and subsistence purposes including mariculture and aquaculture (9).
As a food deficit country, Djibouti imports 90% of the food it consumes (13). Fish constitutes only a small portion of most people’s diet in Djibouti, and most fish is consumed fresh (23), which provides great potential for scaling production and enhancing processing and value addition for fish products.
Indicative Return
15% - 20% ROE
Impact-oriented business models in the fishing sector globally benefit from stock stabilization or restoration and have the potential to generate equity returns of 5-35% (10).
Such returns profiles are generally driven by increased volumes linked to stock recoveries, improvements in supply chain efficiency, access to higher-value markets, and reductions in raw material supply volatility (10).
Investment Timeframe
Medium Term (5–10 years)
A regional benchmark project, a tilapia farm in Mozambique, reported a payback period of eight years (11).
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Capital - Limited Investor Interest
Capital - Requires Subsidy
Impact Case
Sustainable Development Need
Djibouti's agricultural sector accounts for only 3% of the country's GDP, and its fresh water resources are extremely scarce (12).
Agricultural production covers only 10% of domestic food demand, and 90% of the food Djibouti required are imported. The country is hence vulnerable to price fluctuations and high food prices (13).
The average annual marine production in Djibouti is less than 2,500 tons due to low productivity and efficiency (12). The fishery industry is hindered by capital shortages and outdated technologies, with only three fishing terminals with few simple facilities (12).
Fish is a highly perishable product and can cause supply chain and health concerns unless refrigerated properly.
Gender & Marginalisation
Women are key stakeholders in the fishing value chain as they account for 80% of fish commercialization and support part of production activity with inputs, fuel and the provisions of small loans to fishers who in turn provide them with fish (14).
While fishing jobs are almost entirely taken by men, 59% of the processing work is done by women (15).
Expected Development Outcome
Increased value and volume of fish production contributes to food security and decreases dependency on food imports for Djibouti.
Aquaculture farms enhance incomes of fishers and empower and build resilience of fishing communities, including thanks to reduced infrastructure gaps.
Sustainable fishery advances fishing methods, mitigates overfishing challenges and preserves the marine ecosystem.
Gender & Marginalisation
Sustainable fishery terminals are a key resource for food and nutrition security and job creation for youth and women in the country (15).
Labor-saving technologies for domestic fishers' work, such as refrigeration, allows women to take advantage of new opportunities and for girls to attend school (30).
Improved access to refrigeration can prevent perishable foods, including fish, from spoiling (29), which results in better resource utilization and reduced food waste especially relevant for low income communities.
Primary SDGs addressed
14.5.1 Coverage of protected areas in relation to marine areas
14.7.1 Sustainable fisheries as a proportion of GDP in small island developing states, least developed countries, and all countries. In particular, the proposed aquaculture is terrestrial and therefore conserves the marine biodiversity of the Gulf.
0.17% (2020) (17).
0.34% (2017) (17).
100% (globally) (16).
N/A
2.1.1 Prevalence of undernourishment
2.2.1 Prevalence of stunting (height for age <-2 standard deviation from the median of the World Health Organization (WHO) Child Growth Standards) among children under 5 years of age
18.9% (2017) (18).
Prevalence of stunting in children under 5 years of age is 31.01% (2019) (16).
0% (globally) (16).
0% (globally) (16).
8.1.1 Annual growth rate of real GDP per capita
GDP per capita growth was above 6% in two consecutive years, before turning negative in 2020 (19).
Targeted rates of annual GDP growth are above 11% for each year between 2023 and 2034 (20).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Indirectly impacted stakeholders
People
Planet
Public sector
Outcome Risks
Aquaculture may result in environmental degradation caused by the waste and effluents, which can lead to eutrophication or nitrification (21).
Fishing activities, if not managed well, may lead to depletion of fishery resources and deterioration of water bodies used for human consumption and natural ecosystems, including mangroves (22).
Fishery may lead to displacement of native species caused by competition for space and food with newly introduced species (22).
Impact Risks
Limited domestic demand for marine products may reduce impact, as current fish consumption in Djibouti is at 1.5 kg per person and year (23), especially considering limited available infrastructure.
Impact Classification
What
Sustainable fishery and aquaculture farms improve food security, address maritime resource challenges, and contribute to national economic growth.
Risk
While the model of sustainable fishery is proven, Djibouti's limited supporting infrastructure and a currently limited domestic demand for marine products require consideration.
Impact Thesis
Improve food security, address maritime resource challenges, and contribute to national economic growth.
Enabling Environment
Policy Environment
Strategy for Accelerated Growth and Employment Promotion (SCAPE) 2015-2019, 2014: Identifies the need for a reorganization of the sea products industry in terms of human resources and distribution capacity in order to achieve product and job creation targets (24, 25).
Djibouti Vision 2035, 2014: Proposes three axes of development for the maritime food sector, namely intensifying demersal catch, making use of small scale pelagic sources, and experimenting with molluscs and crustaceans, which is expected to lead to 47,000 tonnes of food resources per year (24, 20).
Master Plan for the Development of the Primary Sector, 2009: Includes the expansion of the primary sector’s contribution to national GDP, the increase of crop and animal production, and better exploitation of Djibouti's water resources, incuding fishery terminals and aquaculture (24).
National Programme for Agricultural Investment and Food and Nutritional Security 2016-2020, 2015: Identifies accessibility to nutritious food as the overall objective. Lists food security, economic growth and export orientation, and support to vulnerable groups among four major programmes with relevance to fishery and aquaculture (31).
Financial Environment
Financial incentives: The Caisse Populaire d’Epargne et de Credit (CPEC) offers credits intended for fisherman for the acquisition of fishing tools and equipment. The credit amounts are DJF 500,000-2,000,000 (USD 2,800-11,300) (27).
Fiscal incentives: The Government of Djibouti provides exemptions from fuel tax for fishing activities (24).
Regulatory Environment
Fisheries Code, 2002: Regulates Djibouti's fisheries sector; incorporates the law adopted in 2002, an implementing decree of the said law (2007), and an order on fishing licenses (2007). The Fisheries Code is to be reviewed with support from the European Union (23).
Law No.142, 2001: Governs the health inspection of fishery products and institutions handling such products (23).
Law No. 52, 1979: Establishes the maritime boundaries of the Republic of Djibouti, the Territorial Waters, the Adjacent Zone and the Exclusive Economic Zone (EEZ) (23).
Law No. 52, 1999 and Decree No. 27, 2004: Grants fishing port concession to the Djibouti Maritime Management and Investment Company (23).
Law No. 54, 1999: Establishes and regulates the Djibouti fishing port free zone (23).
Marketplace Participants
Private Sector
Djibouti Maritime Management Investment (DMMI), Bank of Africa, Caisse Populaire d’Epargne et de Credit (CPEC), Africa Sustainable Aquaculture (ASA) Fish, Raino Tech4Impact, Green Cooling Initiative (GCI).
Government
Ministry of Agriculture, Fisheries and Marine Resources; Ministry of Housing, Regional Planning and the Environment; Ministry of Finance and Economy; Ministry for the Promotion of Women and Family Planning; Djibouti Agency for Social Development (ADDS).
Multilaterals
United Nations Industrial Development Organization (UNIDO), Food and Agricultural Organisation (FAO), European Union, African Union Interafrican Bureau for Animal Resources (AU-IBAR), World Bank, International Fund for Agricultural Development (IFAD), World Food Programme (WFP), UNEP.
Non-Profit
Oxfam, Agence Francaise de Developpement (AFD), National Investment Promotion Agency (NIPA), Djibouti Chamber of Commerce, Centre de Leadership et de l'Entrepreneuriat (CLE).
Public-Private Partnership
A fishing port, with a free-zone status, built by the Government of Djibouti is on concession to a private management company, the Djibouti Maritime Management and Investment Company (23).
Target Locations
Djibouti: Obock
Djibouti: Arta
Djibouti: Djibouti (City)
References
- (1) Oxford Business Group. 2016. Plans to develop Djibouti's agriculture and fishing to promote food and employment security. https://oxfordbusinessgroup.com/analysis/living-land-and-sea-plans-develop-agriculture-and-fishing-promote-food-and-employment-security.
- (2) Republic of Djibouti. 2014. Vision Djibouti 2035. http://ccd.dj/w2017/wp-content/uploads/2016/01/Vision-Nationale.pdf.
- (3) FAO. 2016. Fishery and Aquaculture Country Profile: The Republic of Djibouti. http://www.fao.org/fishery/facp/DJI/en.
- (4) World Fish Center. 2021. African women join forces to overcome COVID-19 challenges in aquatic food systems. http://blog.worldfishcenter.org/2021/03/african-women-join-forces-to-overcome-covid-19-challenges-in-aquatic-food-systems.
- (5) Medouar, Mohamed. April 2021. For pastoral communities in Djibouti, effective management of water and agro-pastoral resources build resilience from climate shocks. https://blogs.worldbank.org/water/pastoral-communities-djibouti-effective-management-water-and-agro-pastoral-resources-build.
- (6) UNIDO. 2021. Empowering women in Djibouti through dry fish-processing training. https://www.unido.org/news/empowering-women-djibouti-through-dry-fish-processing-training.
- (7) Africa Sustainable Aquaculture. 2020. ASA Ethiopia. https://asafish.com/index.html.
- (8) Larive International. 2021. FoodTechAfrica is improving food security through private sector development in East Africa. https://www.larive.com/ppp/foodtechafrica.
- (9) World Bank. 2018. Total fisheries production (metric tons)-Djibouti. https://data.worldbank.org/indicator/ER.FSH.PROD.MT?locations=DJ.
- (10) Encourage Capital. 2016. Investing for Sustainable Global Fisheries. http://investinvibrantoceans.org/wp-content/uploads/documents/FULL-REPORT_FINAL_1-11-16.pdf.
- (11) Salia, A.M.J. 2008. Economic analysis of small-scale tilapia aquaculture in Mozambique. Institute Nacional de Desenvolvimento de Aquaculture. https://www.yumpu.com/en/document/read/36178964/economic-analysis-of-small-scale-tilapia-aquaculture-in-mozambique.
- (12) Kaizhi, Li. 2020. Chinese expert helps Djibouti develop marine fishery industry. http://www.china.org.cn/business/2020-12/31/content_77068403.htm.
- (13) IFAD. 2014. Programme d’appui à la réduction de la vulnérabilité dans les zones de pêches côtières (PRAREV-PÊCHE). https://www.ifad.org/documents/38711624/40089492/Project+design+2014.pdf/0a162204-2f69-418c-810b-45bc5e474e78?t=1611222826000.
- (14) IFAD. 2013. Programme to Reduce Vulnerability in Coastal Fishing Areas. https://www.ifad.org/en/web/operations/-/project/1100001671.
- (15) FAO. 2021. Djibouti and FAO. Building capacities for sustainable agricultural development and food security. http://www.fao.org/3/ax423e/AX423E.pdf.
- (16) Sustainable Development Report. 2021. Country Profiles: Djibouti. https://dashboards.sdgindex.org/profiles/djibouti.
- (17) UN Global SDG Database. 2021. SDG Indicators. https://unstats.un.org/sdgs/indicators/database/.
- (18) Trading Economics. 2017. Djibouti - Prevalence Of Undernourishment (% Of Population). https://tradingeconomics.com/djibouti/prevalence-of-undernourishment-percent-of-population-wb-data.html.
- (19) World Bank Data. 2021. https://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG?locations=DJ.
- (20) Republic of Djibouti. 2014. Vision Djibouti 2035. http://ccd.dj/w2017/wp-content/uploads/2016/01/Vision-Nationale.pdf.
- (21) Serpa, D. and Duarte, P. 2017. Impacts of Aquaculture and Mitigation Measures. Global Science Books. http://www.globalsciencebooks.info/Online/GSBOnline/images/0812/DBPBMB_2(SI1)/DBPBMB_2(SI1)1-20o.pdf.
- (22) Martinez-Porchas, M. and Martinez-Cordova, L. 2012. World Aquaculture: Environmental Impacts and Troubleshooting Alternatives. Scientific World Journal. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3353277.
- (23) FAO. 2016. Fishery and Aquaculture Country Profile: The Republic of Djibouti.
- (24) Oxford Business Group. 2016. Plans to develop Djibouti's agriculture and fishing to promote food and employment security.
- (25) Government of Djibouti. 2015. Strategie de Croissance Accélérée et de Promotion de l'Emploi. https://economie.gouv.dj/wp-content/uploads/de95d383afef8bcbe0a3bc609a7f5c76.pdf.
- (26) Caisse populaire d'épargne et de crédit (CPEC). 2021. Les Services Financieres de La CPECD.
- (27) Green Cooling Initiative. 2019. Environmentally friendly cold storage for fish -an example from Kenya. https://www.green-cooling-initiative.org/fileadmin/user_upload/2019_GCI_FishCoolingStore.pdf.
- (28) AGRA. 2019. 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.
- (29) Green Cooling Initiative. 2019. Environmentally friendly cold storage for fish - an example from Kenya. https://www.green-cooling-initiative.org/fileadmin/user_upload/2019_GCI_FishCoolingStore.pdf.
- (30) FAO. 2016. Promoting gender equality and women’s empowerment in fisheries and aquaculture. http://www.fao.org/3/i6623e/i6623e.pdf.
- (31) IFAD. 2019. Project Proposal to the Adaptation Fund Integrated Water and Soil Resources Management Projects. https://pubdocs.worldbank.org/en/209591619648937202/14538-IFAD-Djibouti-PROGIRES-fullproposal-clean.pdf.