Tanzania seeking investors for USD 108 million worth of seafood industry projects

Editor/Mohamed Shihab

Tanzania has proposed seven projects valued at nearly USD 108 million (EUR 93 million) that aim to enhance its seafood sector and is seeking domestic and international investors to partner with the government-owned Tanzania Fisheries Corporation (TAFICO) in implementing them.The projects, according to a report from the Tanzanian Ministry of Livestock and Fisheries, will be implemented through a mixture of foreign direct investment, joint ventures, and public-private partnerships.

Tanzania has proposed seven projects valued at nearly USD 108 million (EUR 93 million) that aim to enhance its seafood sector and is seeking domestic and international investors to partner with the government-owned Tanzania Fisheries Corporation (TAFICO) in implementing them.

The projects, according to a report from the Tanzanian Ministry of Livestock and Fisheries, will be implemented through a mixture of foreign direct investment, joint ventures, and public-private partnerships.

One of the projects TAFICO has proposed is a cage fish-farming project on Lake Victoria estimated to cost USD 25.7 million (EUR 22 million), which intends to increase export volumes and better meet national consumption rates with domestic supply – at a time when Tanzania's demand of fish has exceeded supply from capture fisheries alone – according to the ministerial report.

The report further explained that Tanzania's portion of Lake Victoria, which comprises more than 34,000 square kilometers and is equivalent to 49 percent of the lake’s total size, already has zoned areas "for cage fish farming and offers great potential to develop a profitable, vertically integrated industry composed of hatchery, feed plants, grow-out operations, and processing/packaging units."

Another project for which TAFICO is seeking investors is the construction of a USD 7 million (EUR 5.9 million) plant with the capacity to produce 12,000 metric tons of feed destined for Tanzanian, Kenyan, and Ugandan cage fish farms operating on Lake Victoria.

"The project aims to improve the overall productivity and sustainability of the fish-farming industry in Tanzania, and by addressing the issue of quality feed, it will not only enhance the health and growth of farmed fish but also contribute to food security and economic growth in the region," the ministerial report said.

In an effort to reduce post-harvest losses, TAFICO has also initiated a project for the construction of cold storage and ice plants in Dar es Salaam, Tanga, and Lindi.

"The project will provide high-quality cold storage services consistent with customer needs and improve distribution channels," the report said.

Other projects TAFICO has proposed include installing 600 fish-aggregating devices (FADs) across all 16 of Tanzania’s coastal districts to boost production of artisanal fishing, the construction of a USD 6 million (EUR 5.1 million) facility to add value to sardines and other small pelagic fish products, and the development of mariculture operations producing high-value species such as mud crab and sea cucumber along the Indian Ocean coastline at an estimated cost of USD 16.9 million (EUR 14.5 million).

"Mud crabs and sea cucumber are highly sought after in Far East markets; hence, their culture is lucrative," the Ministry of Livestock and Fisheries said. 

Elsewhere, Tanzania, a member of the Indian Ocean Tuna Commission (IOTC), is also seeking a partner in acquiring and operating two multipurpose fishing vessels for deep-sea fishing of tuna and tuna-like species in Tanzania's exclusive economic zone (EEZ) on the Indian Ocean.

Though Tanzania is reaching out to foreign investors for these projects, a recent U.S. Department of State report highlights that several factors have largely snuffed out the desire of foreign investors to back projects in the East African country, including “arbitrary, untransparent, and inconsistent application of tax policy and regulations; increasing corruption; lengthy and open-ended negotiations with government ministries to start a business; difficulty in hiring foreign workers; challenges finding high-skilled local workers; regulatory and policy instability;” and more.

“While the Government of Tanzania welcomes and seeks foreign direct investment to spur development and economic growth, needed reforms to improve the overall business climate and rebuild trust between the private sector and government remain limited,” the report said.

The problem of attracting foreign investment is also rife across other seafood sectors in Africa.

Edwin Ngwafor, the managing director of Cameroonian fishing firm Timezone Marine Ventures, recently told SeafoodSource that “both Chinese and European actors have little interest in a strong African fish-processing industry,” as they wish to control the raw materials themselves.

“It’s cheaper and easier for Chinese or European firms to buy or catch raw fish in Africa and then process and sell it in higher-value markets at home,” he said. “Up to 80 percent of seafood’s value is created after the fish is caught in processing, branding, certification, and distribution. Keeping that value chain outside Africa preserves their economic advantage.”

Therefore, the vast majority of aid from foreign investors like China and the E.U. is strategic, not altruistic, according to Ngwafor.

“China’s fisheries aid often involves building ports that Chinese fleets use. E.U. support measures are typically tied to maintaining access for E.U. fleets, not to create competition from African processors,” he said. “In practice, both sides prefer a dependent African partner, not a competitive one.”