From Kenya to Nigeria: Opportunities in Africa’s fish farming industry

Fadoua Boudiba

Interview with Fadoua Boudiba

Fadoua Boudiba is the Africa lead for aquaculture investment firm Aqua-Spark. Jaco Maritz recently spoke with Boudiba about investment opportunities in the continent’s aquaculture value chain.

The interview covers the following topics:

  • The anticipated increase in demand for fish in Africa
  • Key fish species that offer growth potential within the continent
  • Additional opportunities throughout the aquaculture value chain
  • Prominent markets for aquaculture investment
  • An overview of Aqua-Spark’s investments in Africa

With Africa’s population projected to swell from approximately 1.5 billion to around 2.5 billion by 2050, the demand for fish is set to significantly outpace today’s levels. Consumption is anticipated to rise from about 10 million tonnes per year currently to between 16 million and 29 million tonnes. Overexploitation has capped the potential to increase wild catch, underscoring the urgent need for expanded fish farming production.

One firm seeking to tap into the continent’s expected growing demand for fish is Aqua-Spark, a Netherlands-based aquaculture investment firm. It has recently launched a dedicated Africa fund aimed at investing across the aquaculture value chain.

Fadoua Boudiba, Aqua-Spark’s Africa lead, points out that about 40% of the fish consumed in Africa is imported, even though the continent has sufficient resources to support domestic production.

Opportunities in the aquaculture industry

Boudiba says that when people think of aquaculture, they often consider only fish, but that Aqua-Spark is looking at opportunities throughout the entire value chain.

Regarding fish species, Boudiba mentions that the firm does not favour any specific kind. However, in a 2021 report, Aqua-Spark highlighted tilapia as a key species to meet Africa’s fish demand. Despite many tilapia species being native to sub-Saharan Africa, the region’s production pales in comparison to that of global leaders such as Brazil, China, and Egypt. Aqua-Spark estimates tilapia production in sub-Saharan Africa at about 125,000-150,000 tonnes annually. The firm has also stated that in its pipeline for the region, tilapia farms and hatcheries represent around 40% of the total investment need and 50% of the opportunities.

In addition to tilapia, Aqua-Spark believes catfish could significantly contribute to the growth of sub-Saharan Africa’s aquaculture industry. Most of the region’s catfish production is concentrated in Nigeria, with production volumes comparable to the entire sub-Saharan tilapia output. This is mainly due to a lack of consumer familiarity with the species in most other sub-Saharan African countries. Contrary to tilapia, where large corporate farms are the growth drivers, Nigeria’s catfish industry is dominated by small- and medium-scale farms.

Moreover, catfish farming is gaining ground in other nations, including Ghana and Uganda, further highlighting its potential in the region’s aquaculture industry.

Aqua-Spark has also identified opportunities in the production of seaweed, sea cucumber, and shrimp. Additionally, across various species, there are prospects in areas like alternative fish feed ingredients such as black soldier fly, as well as in cold-chain logistics and distribution, and online B2B and B2C marketplaces for fish and farming inputs.

High-potential markets

When asked about the African countries that offer the most promising opportunities for aquaculture investments, Boudiba notes that the industry is more advanced in East Africa, with Kenya specifically hosting numerous successful fish farming operations. She also highlights Nigeria and Ghana as promising markets. Despite this, Kenya faces a deficit of about 300,000 tonnes of fish per annum, while Nigeria’s deficit exceeds 500,000 tonnes. Aqua-Spark is also scouting for opportunities in French-speaking Africa.

Boudiba further explains that digital marketplace-type businesses tend to thrive in regions with more developed aquaculture industries, where there is a larger pool of buyers and sellers to engage with the platform. Conversely, in less developed markets like Mozambique, a fully integrated model that encompasses everything from hatcheries and feed production to retail and distribution represents a more viable investment approach.

Chicoa Fish Farm in Mozambique

Chicoa Fish Farm in Mozambique

A snapshot of Aqua-Spark’s African investments

Aqua-Spark has invested in four aquaculture-related companies in Africa:

Chicoa Fish Farm (Mozambique): Aqua-Spark’s first investment in Africa was in Chicoa Fish Farm in Mozambique, which produces tilapia in Cahora Bassa lake. The farm’s cages are situated in deep waters close to the shore, making for a cost-effective operation, though a lack of infrastructure has been a major challenge for the company. Chicoa aims to become one of the largest tilapia producers in the region, targeting 20,000 tonnes in the next few years –10,000 tonnes from its own operations and another 10,000 tonnes through contracted small-scale farmers.

Indian Ocean Trepang (Madagascar): Indian Ocean Trepang (IOT), based in Madagascar, specialises in the cultivation of sandfish or Holothuria scabra, a type of sea cucumber. This delicacy is especially favoured by Chinese communities globally. The company’s primary markets include China, Singapore, Taiwan, South Korea, North America, and Europe. IOT operates a solar-powered hatchery for sea cucumbers year-round. After approximately 18 months of growth, the adult sea cucumbers are harvested and processed into ‘trepang’, the dried form of the sea cucumber. The trepangs are sold in dry markets and are also available rehydrated, frozen, and ready-to-cook in modern trade outlets. Additionally, a portion of IOT’s production is subcontracted to local fishermen, providing them access to a profitable global market. Sandfish is one of the most threatened tropical sea cucumbers because of its high price, reaching up to $1,800 per kilogramme when processed and dried into trepang.

Lake Harvest (Southern and East Africa): Lake Harvest cultivates tilapia in floating cages located on both the Zimbabwe and Zambia shores of Lake Kariba, as well as in Lake Victoria, Uganda. The company has invested early in processing facilities and a distribution network to cater to markets throughout Southern and Eastern Africa.

Aquarech (Kenya): Towards the end of last year, Aqua-Spark led a $1.7 million investment round in Aquarech, alongside other investors including Acumen, Katapult, and Mercy Corps Ventures. Aquarech is a mobile app platform that enables manufacturers, farmers, and buyers to trade, purchase, and sell quality fish feed and fingerlings (young fish ready for rearing). The company also extends support to small-scale fish farmers by offering training on best fishing practices and providing financing options for feed purchases.

Boudiba emphasises that the quality of the fish produced by farmers heavily relies on the quality of the feed. She notes that although Kenya has several government programmes that offer fish feed subsidies, their effectiveness is limited without proper education for farmers on best practices.

Another reason why Aqua Spark likes tech-enabled companies such as Aquarech is because of their ability to collect industry data. “Having accurate, reliable data is one of the most difficult parts of the aquaculture industry. It’s a very nascent market … So it’s very precious information,” Boudiba says.