Victory Farms grows the tilapia species of fish in Lake Victoria in Kenya.
Fish consumption to just about triple to 29 million tonnes by 2050
With Africa’s inhabitants anticipated to develop from roughly 1.5 billion at present to round 2.5 billion by 2050, the demand for protein will considerably exceed present ranges. As one of the cost-effective animal protein sources, fish will play an essential position in assembly this dietary requirement.
Presently, annual fish consumption in sub-Saharan Africa is about 10 million tonnes, however this determine is projected to surge to 29 million tonnes by 2050. Native aquaculture contributes lower than 10% to the entire fish provide, with the overwhelming majority sourced from wild catches. Nonetheless, on account of overfishing, wild fish shares are underneath strain, that means {that a} important improve in fish farming is crucial to fulfill future demand.
In accordance with Fadoua Boudiba, Africa lead at Dutch-based aquaculture funding agency Aqua-Spark, about 40% of the fish consumed in Africa is imported, regardless that the continent has adequate sources to help home manufacturing.
Learn our full interview with Fadoua Boudiba: From Kenya to Nigeria – Opportunities in Africa’s fish farming industry
Tilapia on the menu
One of the vital in style farmed fish species in Africa is tilapia, broadly recognised as a wholesome, sustainable, and inexpensive supply of vitamins. This resilient fish thrives in quite a lot of environments, together with lakes, rivers, ponds, and closed programs. Africa and tilapia have an extended historical past collectively: tilapia is featured in historical Egyptian mythology relationship again to three,000 BCE. Many tilapia species are indigenous to rivers and lakes in sub-Saharan Africa.
Whereas tilapia was historically wild-caught by native fishermen, farming of the species was first launched to the continent within the late Forties by colonial regimes, primarily the French and British. All through the remainder of century, a lot of tilapia farming was performed as a aspect enterprise by small-scale farmers who additionally cultivated different crops. Nonetheless, the early 2000s noticed the emergence of extra large-scale industrial producers. Aqua-Spark, which has launched a devoted Africa funding fund, estimates that farmed tilapia manufacturing in sub-Saharan Africa is roughly 125,000 to 150,000 tonnes yearly, accounting for about 40% of all farmed fish within the area. Whereas there are nonetheless many small to mid-sized tilapia producers, the expansion of the trade is anticipated to be pushed by large-scale, vertically built-in farming enterprises.
A distinguished large-scale tilapia producer is the FirstWave Group, which farms fish in cages on Lake Kariba in Zambia and on the Ugandan aspect of Lake Victoria. The corporate markets its fish underneath the Yalelo model. Between its two operations, FirstWave produces roughly 15,000 to 20,000 tonnes of tilapia annually. Like many giant aquaculture operations in Africa, FirstWave has vertically built-in by establishing its personal fish feed manufacturing unit. Historically, a lot of the fish feed used on the continent was imported from Europe or Latin America. Nonetheless, these feeds are sometimes costly and never particularly developed for native situations. FirstWave not solely produces feed for its personal use but in addition sells it to different farmers.
Learn extra: Capitalising on opportunities in Africa’s fish farming industry
One other firm capitalising on the tilapia alternative is Victory Farms, which cultivates its fish in Lake Victoria, Kenya. It was based in 2014 by Joseph Rehmann and Steve Moran. Having beforehand labored on an aquaculture undertaking in Ghana, the founders recognised the substantial but unmet demand for fish in East Africa. On the time, this deficit was being stuffed by fish sourced from China, however the high quality was questionable. They aimed to supply high-quality tilapia to provide all through Kenya and ultimately increase to different East African international locations.
Learn our full interview with Joseph Rehmann: Kenyan company tapping into ‘multibillion-dollar’ fish-farming opportunity
Initially, the co-founders have been instructed that Lake Victoria was not appropriate for aquaculture on account of its excessive nutrient content material, shallowness, and funky temperatures. Nonetheless, after conducting complete technical and industrial feasibility research, they concluded that Africa’s largest lake was, in reality, ultimate for tilapia farming. Victory Farms maintains roughly 30 million fish at any given time and sells about 2 million tilapia every month. To spotlight the pent-up demand, fish consumption elevated four-fold within the western Kenyan city of Rongo after Victory Farms began supplying there.
In accordance with the corporate, the feed conversion ratio of tilapia – the quantity of feed required to supply a unit of fish or meat – is 5 occasions extra environment friendly than that of beef. Nonetheless, the affordability of tilapia tremendously is dependent upon the farmer’s manufacturing strategies. General, manufacturing prices in sub-Saharan Africa stay considerably increased than in Asia or South America.
Victory Farms is advancing towards precision fish farming with an automatic drone system designed to forecast fish efficiency. The corporate has said it’s in search of a partnership with an aquaculture analysis agency to deploy drones that can monitor fish ponds. In accordance with Rehmann, this initiative will allow the corporate to evaluate the well being of the fish by analysing the color of the water. This information may then be used to regulate feed or oxygen ranges.
FirstWave Group operates its personal retail shops underneath the Yalelo model.
Catfish: Progress potential past Nigeria
One other farmed fish species with progress potential in Africa is catfish. Presently, catfish consumption is predominantly concentrated in Nigeria, the place it’s a in style delicacy. In most different sub-Saharan African international locations there’s a lack of client familiarity with the species. Remarkably, Nigeria alone produces about 150,000 tonnes of catfish per 12 months, a quantity corresponding to the whole tilapia manufacturing of sub-Saharan Africa mixed.
As soon as previous the fingerling (younger fish prepared for rearing) stage, catfish can dwell in quite a lot of situations. The species is much less vulnerable to viral illnesses and might even survive out of water so long as their pores and skin stays moist.
The catfish trade in Nigeria consists primarily of small- to medium-sized farms. A notable instance is entrepreneur Femi Eniola, who recognized a market alternative and based the Osky Catfish Hatchery Grow-out & Processing Facility in Ondo State, southern Nigeria, in 2018. From the outset, Eniola recognised the significance of controlling the whole worth chain, from hatching catfish eggs to smoking and different processing actions. He additionally added a feed mill that utilises domestically out there components akin to maize, soya cake, fishmeal, and rice. Eniola has cited difficulties in securing financial institution financing for aquaculture tasks and a scarcity of expert labour as main challenges he faces.
Learn our full interview with Femi Eniola: How this entrepreneur set up a dried catfish business
The apply of catfish farming can also be gaining traction in different nations, together with Ghana and Uganda. Aqua-Spark anticipates that it’s only a matter of time earlier than a broader catfish trade develops in these international locations and past.
From farm to market: Distribution dynamics
“The marketplace for domestically farmed tilapia is there and can develop tremendously … However it doesn’t simply come to your lap. You’ve acquired to go … and get it,” says Mark Amechi, proprietor of Ghana-based tilapia producer Tropo Farms. His assertion underscores that success in Africa’s aquaculture trade isn’t nearly manufacturing; it additionally requires savvy distribution and retail methods.
Most farmed tilapia in sub-Saharan Africa are offered contemporary by farmers. The fish then results in markets, the place it’s primarily deep-fried or grilled earlier than being supplied to customers. In Western Africa, native processors additionally dry, salt, and smoke the fish.
Funding agency Aqua-Spark notes that whereas gross sales of tilapia presently depend on conventional advertising and marketing channels and a community of devoted fish outlets, future methods will incorporate extra progressive supply fashions, together with on-line business-to-business (B2B) and business-to-consumer (B2C) platforms. Even when customers have entry to farmed tilapia, they have to be satisfied of its well being advantages, style, and sustainability to make a purchase order. Due to this fact, strong advertising and marketing – each on-line and offline – is crucial.
Like a number of different large-scale tilapia producers, Victory Farms has developed its personal gross sales and distribution community. The corporate beforehand encountered challenges with exterior logistics suppliers who would flip off the truck fridges to save lots of gasoline, which compromised the standard of its fish. To deal with this, the corporate now operates its personal fleet of vehicles. Victory Farms additionally has over 65 branded stores throughout Kenya, primarily serving market merchants who cook dinner and promote the fish on the identical day. None of those shops have ice or refrigeration gear; all fish is offered inside sooner or later. To make sure no loss on account of spoilage, Victory Farms maintains a complete dataset on every market dealer to foretell every day gross sales volumes. Market merchants place orders and report gross sales by way of an SMS platform. “We will precisely forecast precisely how a lot fish to inventory within the department tomorrow, so we’ve no spoilage. Our wastage is beneath 1%,” explains Rehmann.
Round 90% of Victory Farms’ produce is offered to market merchants, with the remaining portion provided to lodges and eating places. Rehmann mentions that whereas the corporate could ultimately discover supplying Kenyan supermarkets, the present focus is on the mass market.
Lake Harvest, which cultivates tilapia in floating cages alongside the shores of Lake Kariba in each Zimbabwe and Zambia, in addition to on the Ugandan aspect of Lake Victoria, began by exporting contemporary tilapia filets to Europe greater than twenty years in the past. Nonetheless, some years later, challenges akin to lowered flight frequency between Zimbabwe and Europe, coupled with rising manufacturing volumes, prompted Lake Harvest to reorient its focus in the direction of regional markets. As we speak, the corporate operates its personal depots and stores all through Southern and East Africa. Nonetheless, investing in cold-chain logistics and distribution networks is dear, necessitating excessive product volumes to get better prices. Consequently, Lake Harvest partnered with the Zimbabwean livestock and agriculture enterprise, Surrey Group, to additionally promote different animal proteins, akin to poultry.
Platinum Fisheries – positioned on the outskirts of Lagos, Nigeria’s industrial hub, and a producer of catfish, tilapia, mackerel, and snails for the home market – has shifted its gross sales technique to deal with B2B purchasers. These embody lodges, eating places, and distributors who provide fish processing factories and public seafood markets. The pivot, initiated by founder Dupe Killa-Kafidipe, was primarily based on the realisation that promoting in bigger portions to companies might be extra worthwhile than direct client gross sales. Moreover, promoting to B2B purchasers affords the benefit of receiving advance funds, which ensures a secure money circulate for the corporate. Regardless of this B2B focus, Killa-Kafidipe is contemplating a return to the patron market by introducing branded processed fish merchandise, which promise increased margins.
Learn our full interview with Dupe Killa-Kafidipe: Entrepreneur taps into Nigeria’s vast demand for fish
There additionally exists alternatives for African aquaculture producers to export their produce to other African countries, particularly with the rollout of the African Continental Free Commerce Settlement (AfCFTA). Final 12 months, the World Financial Discussion board (WEF) forecasted that the profitable implementation of the AfCFTA would create promising alternatives within the agriculture and agro-processing sectors, particularly inside the fish and meat industries. As earnings ranges in Africa improve, each sectors are anticipated to witness an increase in total demand, paving the best way for scaled manufacturing and expanded commerce in processed items. “Demand for fish has outpaced native provide, rising at round 4% yearly for the previous decade, and meat consumption can also be on the rise,” said the WEF. The examine additionally highlights alternatives to handle the sector’s wants for inputs akin to fish feed.
For sure merchandise like dried catfish, there’s a substantial worldwide market, significantly amongst Africans residing within the diaspora. Eniola from Osky Catfish, which already exports its merchandise, highlights its recognition: “Catfish has an enormous market in Asia, and in addition in Western international locations like the USA and Canada the place a variety of customers are transferring away from pink meat and starting to look to various protein sources.”
The USAID-funded West Africa Commerce & Funding Hub has additionally recognised a chance to export canned catfish to the US, particularly focusing on West Africans residing in America. This potential is amplified by the African Progress and Alternative Act, which offers eligible sub-Saharan African nations with duty-free entry to the American market, facilitating simpler entry for such merchandise.
Learn extra: From canned catfish to high-end fashion – West African products that are in high demand in the United States
Femi Eniola is the founding father of Osky Catfish Hatchery Develop-out & Processing Facility
Past fish
Aqua-Spark’s Boudiba notes that whereas aquaculture is usually related solely with fish, her agency has broadened its focus to incorporate different aquatic species, together with seaweed, sea cucumber, and shrimp. The agency has backed Madagascar-based Indian Ocean Trepang (IOT), which specialises within the cultivation of sandfish or Holothuria scabra, a kind of sea cucumber. This delicacy is very favoured by Chinese language communities globally. The corporate’s main markets embody China, Singapore, Taiwan, South Korea, North America, and Europe. IOT operates a solarpowered hatchery for sea cucumbers year-round. After roughly 18 months of progress, the grownup sea cucumbers are harvested and processed into ‘trepang’, the dried type of the ocean cucumber. The trepangs are offered in dry markets and are additionally out there rehydrated, frozen, and ready-to-cook in trendy commerce shops. Moreover, a portion of IOT’s manufacturing is subcontracted to native fishermen, offering them entry to a worthwhile international market. Sandfish is among the most threatened tropical sea cucumbers due to its excessive value, reaching up to US$1,800/kg when processed and dried into trepang.
Moreover, there are promising prospects in areas akin to fish feed in addition to logistics and distribution. Singapore-based agribusiness firm Olam Agri has an aqua feed plant in Kwara State in Nigeria which produces over 100,000m2 tonnes of feed yearly. Boudiba additionally highlights potential in various fish feed components like black soldier fly larvae, in addition to on-line B2B and B2C marketplaces for fish and farming inputs. On this context, in the direction of the tip of final 12 months, Aqua-Spark led a $1.7 million investment round in Aquarech, a Kenyan cellular app platform that permits producers, farmers, and patrons to commerce, buy, and promote high quality fish feed and fingerlings. The corporate additionally extends help to small-scale fish farmers by providing coaching on greatest fishing practices and offering financing choices for feed purchases. Boudiba emphasises that the standard of the fish produced by farmers closely depends on the standard of the feed. She notes that though Kenya has a number of authorities programmes that supply fish feed subsidies, their effectiveness is proscribed with out correct schooling for farmers on greatest practices.
One more reason Aqua-Spark is drawn to tech-enabled firms akin to Aquarech is due to their means to gather trade information. “Having correct, dependable information is among the most troublesome components of the aquaculture trade. It’s a really nascent market … So it’s very valuable data,” Boudiba says.
* A model of this text was initially produced for the NTU-SBF Centre for African Studies on the Nanyang Enterprise Faculty in Singapore.