Opinion: Some fishing deals in West Africa make little economic sense

Agreements allowing foreign vessels to fish in the waters of West African states look to be bad deals for both host countries and foreign companies. It’s time to look at the alternatives, writes John Virdin
<p>A Chinese fishing vessel in the waters of Guinea-Bissau. The captain (left) and two local sailors (right) are trying to release a trapped net. (Image: © Liu Yuyang / Greenpeace)</p>

A Chinese fishing vessel in the waters of Guinea-Bissau. The captain (left) and two local sailors (right) are trying to release a trapped net. (Image: © Liu Yuyang / Greenpeace)

Some of humanity’s largest impacts on the oceans have come from the widespread industrialisation of fishing practices during the 20th century. While the rate of this growth in fishing pressure has since slowed in the northern, temperate waters of higher income countries where it originated, it is still increasing throughout the tropics. This is driven largely by foreign, “distant-water” fleets, mostly comprised of vessels registered under a small number of flags – including China, South Korea and Spain.

In the national waters where most fishing occurs, distant-water fleets can only operate legally with the authorisation of coastal and island governments, for example via licensing arrangements or government-to-government access agreements. One region where these arrangements are particularly prevalent is along the coast of West Africa, home to productive fishing grounds that have traditionally been an important source of food, jobs and trade.

Many West African governments negotiate agreements with the respective governments representing distant-water fleets, or directly license the fleets to fish in their waters in exchange for public revenues (including licence fees). But over time, the operations of these fleets have come to be associated with a range of negative environmental and social impacts in the region, including overfishing, conflict and competition with local small-scale fisheries, and incidents of illegal fishing.

As academics (and practitioners), we at Duke University’s Nicholas Institute for Environmental Policy Solutions wanted to ask: putting aside all the negative social and environmental impacts and just looking at the economic benefits, is this “trade for fishing services” a good deal for West African governments?  What are the economic benefits generated for these countries by distant-water fleets, and where are they going? Our hope was – and is – that answering these questions could help the region’s coastal governments better assess if these deals have provided the intended benefits, and/or if there may be alternatives they could consider. 

To answer these questions, we took a snapshot from 2017 of one of the largest distant-water fleets in West African waters: coastal bottom trawlers registered or largely owned in China that are licensed to fish in the waters of Guinea-Bissau, Guinea, Sierra Leone, Liberia and Ghana.

Several years ago, we published a first study that looked at the state of these fisheries in 2015, though the picture was fairly unclear due to limited data. Our subsequent study benefits from much more data, including satellite-based data of vessel movements and interviews with captains about fishing costs, although it is important to acknowledge that we still had some data gaps that we filled with estimates.  So the picture remains fuzzy – but is hopefully getting clearer with each study. 

For these five countries, the size and distribution of the economic benefits suggests that it was either a bad deal for both parties, or at least for the coastal governments.

The economics of some of these deals seem to be a lose-lose for all concerned

In Sierra Leone, Liberia and Ghana, the fleet generated little to no net economic benefits for either the fishing companies or the coastal governments (though it is also worth noting that Liberia licensed relatively little trawling in 2017); in Ghana, the fishing companies took 84% of the relatively low benefits (the amount was estimated as a range from low to high, with the higher end being US$7.7 million).

Although no economic benefits were estimated in Sierra Leone, the government received just over US$2 million in licence fees; estimates suggest that the fishing companies lost money, where costs exceeded revenues. Further north in Guinea and Guinea-Bissau, more significant economic benefits were estimated – as much as US$31 million and $38 million respectively – but almost all were taken by the foreign fishing companies (86% and 93% respectively).

This suggests that the distant-water fleet, in this instance registered or largely owned in China, is not generating much economic benefit for the coastal states of West Africa. Those countries may want to take a hard look at the terms of the deals and perhaps rethink them. For example, they may look alternatively to increase access fees, prioritise local small-scale fleets, and/or limit industrial fishing. At the same time, the fishing companies may need to think critically about how viable these operations are, particularly in places like Sierra Leone, where they appear to have lost money in 2017.

So while much has been written about the environmental and social impacts of distant-water fleets, in the case of West Africa and the China-registered coastal bottom trawler fleet, the economics of some of these deals seem to be a lose-lose for all concerned. In others, they are a loss for the coastal states, at least.

In the more southerly states of West Africa where the economic benefits were estimated to be lower or negative, this trend may be reflective of fisheries overexploitation – potentially driven by fishing subsidies. Going forward, then, one might expect the economic prospects to be dim, if industrial fishing is not reduced.

For the more northern states, the best route to managing fisheries sustainably is to prevent overexploitation, rather than have to reverse it. These governments should maintain fishing limits consistent with the best available information on the stocks. If our estimates from 2017 were correct and the same patterns hold, the coastal governments may at least wish to negotiate a bigger piece of the economic pie.