November 01, 2024
Economy

Namibia's fishing industry suffocates from illegal fishing by Angolan companies

February 24, 2023
Namibia's fishing industry suffocates from illegal fishing by Angolan companies

Illegal fishing by Angolan companies in Namibian waters is drowning the local industry, research firm Simonis Storm has said.

"This has negatively impacted Namibia’s stock of fish and could imply that the total allowable catch (TAC) should decrease as scientists ought to account for illegal fishing in protecting Namibia’s biomass. We are aware that illegal fishing has caused problems for certain sub-sectors in the fishing industry and can have a material impact on total fish landings," said Theo Klein, an Economist with Simonis Storm.

The value of Namibia's exports increased by 21.5% y/y in December 2022, compared to 31.3% y/y in November 2022.

Similarly, on a monthly basis fish exports nearly doubled, rising 50.0% m/m in December 2022.

Klien noted that the weak Rand exchange rate ought to benefit fish export earnings in the first quarter of 2023. However, the company expects export earnings to decrease as fish landings are expected to decrease notably from last year.

Meanwhile, in the horticulture sector the La Nina phenomenon is not proving to benefit Namibia much this year.

Many areas crucial for local food production still have not received adequate, timely or sufficient rain which is therefore expected to limit crop production in 2023.

"This is also evidenced by current water dam levels being below levels recorded 12-months ago. We therefore maintain our negative stance on crop farming activities in 2023 which will likely weigh on agricultural growth for the year."

The astronomical increase in fertiliser prices has been observed since Russia invaded Ukraine early 2022.

As a result, the value of fertiliser imports in Namibia have increased in the past month.

Klein said weaker Rand exchange rate and significant increases in global fertiliser prices all contributed to the steady increase in fertiliser costs.

"Crop farming on a smaller scale could also have led to a lower quantity of fertiliser being imported over this time. This is supported by data from the Agronomic Board which show that the number of hectares being farmed in Namibia is declining," he said.

Furthermore, as a result of interrupted electricity supply in South Africa, certain towns do not have sufficient water due to pumps not being able to operate. 

According to Simonis Storm, this has led to a shortage of water for farmers who now cannot use their irrigation systems at full capacity, with prolonged load-shedding also preventing irrigation systems from being utilised efficiently.

"This is expected to reduce crop production in South Africa and so food price inflation can remain on an upward trend in 2023. Local food prices are also at risk of seeing further increases as we import most of our food from South Africa."

The Namibia Agronomic Board (NAB) recently indicated that Namibia produces only 20% to 30% of its annual food requirement, making the country vulnerable to fresh produce shortages and therefore high prices in South Africa.

"Indeed, local crop production looks bleak when considering that the NAB is largely forecasting shortages between January and May 2023. These developments pose a risk to our inflation forecast of 5.3% in 2023, given that food has the second largest weight (16.5%) in our consumer price basket used to calculate inflation rates," said Klein.

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Last modified on Monday, 27 February 2023 14:17
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