Govt urged to trawl new line on ailing fish industry

GOVERNMENT has been called upon to step in with structural changes and long-term funding mechanisms in a bid to save the ailing fishing industry.

In its latest research report (August 2005) for the fishing industry, Simonis Storm Securities (SSS), a leading stockbroking firm, said Government was a critical stakeholder because of the importance and role the fishing industry played in the Namibian economy. Hard hit by declining revenue – attributed to depressed market conditions and a strong domestic currency – a number of fishing concerns have gone under, laying off thousands of workers in the process.The SSS report said ailing equipment and rather traditional ways of doing business were haunting this once glamorous sector of the Namibian economy.Given the turbulence of the international market, researchers and economists alike have called upon players in the fishing industry to embark on new business management approaches.Most significantly, Government, among other concerned stakeholders such as labour, felt there was a greater need for diversification of destination markets.”Evidence provided throughout this research emphasise the need to change the structure of the industry particularly diversification from traditional wholesale markets into high margin retail sales.”However this can only be realised once critical catch mass becomes available and now would be the best time to investigate potential markets,” said SSS.Fishing is a long-term investment opportunity because of the seasonal and at times random nature of the marine resource.Investigations have however shown that though traditional fishing investors might understand the complexity of the industry, institutional and other investors do not, and in most cases need to be absolutely certain that their investments are inseparable from the rights of exploitation of the resource in the long term.The Simonis Storm research noted that: “Local and international industry players hold the Government in high regard with respect to its fisheries management system and mechanisms to maintain it.”Due to the macro-economic importance of the fishing industry, Government is a stakeholder, in whose best interests it would be to ensure the survival of Namibia’s second largest foreign currency earner.”However, it is understood that to-date, Government has not offered any form of direct financial assistance or at least surety for private funding.Without Government assistance, experts say the industry may possibly not be able to replace vessels in future.Financial institutions and other investors are reportedly becoming increasingly hesitant to finance any further acquisitions in the fishing industry, while the cost of financing continued to cripple operators.Hence Government could assume the role of pooling long-term institutional funds to assist the industry in times of need so as to kick-start recovery.The report pointed out that the Namibian fishing industry is very complex, with catches subject to great variation while preferences and conceptions about fish consumption are changing.”Investors with a corresponding risk profile were more likely to benefit over long-term.”However these investors must also be willing and able to support their investments with needs related to the development of markets, equipment and human capital during peaks and troughs,” the report stated.Hard hit by declining revenue – attributed to depressed market conditions and a strong domestic currency – a number of fishing concerns have gone under, laying off thousands of workers in the process.The SSS report said ailing equipment and rather traditional ways of doing business were haunting this once glamorous sector of the Namibian economy.Given the turbulence of the international market, researchers and economists alike have called upon players in the fishing industry to embark on new business management approaches.Most significantly, Government, among other concerned stakeholders such as labour, felt there was a greater need for diversification of destination markets.”Evidence provided throughout this research emphasise the need to change the structure of the industry particularly diversification from traditional wholesale markets into high margin retail sales.”However this can only be realised once critical catch mass becomes available and now would be the best time to investigate potential markets,” said SSS.Fishing is a long-term investment opportunity because of the seasonal and at times random nature of the marine resource.Investigations have however shown that though traditional fishing investors might understand the complexity of the industry, institutional and other investors do not, and in most cases need to be absolutely certain that their investments are inseparable from the rights of exploitation of the resource in the long term.The Simonis Storm research noted that: “Local and international industry players hold the Government in high regard with respect to its fisheries management system and mechanisms to maintain it.”Due to the macro-economic importance of the fishing industry, Government is a stakeholder, in whose best interests it would be to ensure the survival of Namibia’s second largest foreign currency earner.”However, it is understood that to-date, Government has not offered any form of direct financial assistance or at least surety for private funding.Without Government assistance, experts say the industry may possibly not be able to replace vessels in future.Financial institutions and other investors are reportedly becoming increasingly hesitant to finance any further acquisitions in the fishing industry, while the cost of financing continued to cripple operators.Hence Government could assume the role of pooling long-term institutional funds to assist the industry in times of need so as to kick-start recovery.The report pointed out that the Namibian fishing industry is very complex, with catches subject to great variation while preferences and conceptions about fish consumption are changing.”Investors with a corresponding risk profile were more likely to benefit over long-term.”However these investors must also be willing and able to support their investments with needs related to the development of markets, equipment and human capital during peaks and troughs,” the report stated.

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