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Billions in vital foreign currency revenue lost

Billions in vital foreign currency revenue lost

Niël Terblanché

THE chaotic result of the auction to sell the Namibian government’s portion of the annual Total Allowable Catch is a missed opportunity for the country to earn up to N$1.5 billion of much needed revenue in foreign currency.

 

Instead, the auction only generated N$8.46 million from the five bidders who agreed to pay for the 100 tonnes of hake and the 1 517 tonnes of horse mackerel, and 300 tonnes of monk fish.

 

Matti Amukwa, the chairman of the Confederation of Namibian Fishing Associations, said the gross domestic product of Namibia, especially in a time where the COVID-19 pandemic devastated other sectors of the economy, could have been N$1.5 billion stronger.

 

“The CNFA stated officially that the stakeholders from the fishing industry were never consulted. Neither the fisheries or finance ministers, nor the High-Level Panel on the Namibian Economy discussed this plan with the industry,” Amukwa said.

 

He is of the opinion that the Namibian economy will now take much longer to recover as a result of the missed opportunity to earn substantial tax and foreign currency revenue.

 

“The fish is still in the sea and on land people employed by the industry face a bleak future because of the auction fiasco and the imminent withdrawal of foreign direct investment in the fishing industry because it will most certainly result in large scale retrenchments and job losses,” he said.

 

Amukwa is of the opinion that the Minister of Fisheries and Marine Resources, Albert Kawana’s allegation that the fishing industry somehow sabotaged the auction process is unfounded.

 

“Why would any person in their right mind swim in water where he knows he will drown? The reserve prices that were set for the auction were already far above the production cost, which means that no sane person would enter a bid if he knows that the company or factory will make a loss,” he said.

 

According to Amukwa, the fact that speculators were allowed to participate in the auction is the real reason for the failure of the quota auction.

 

He said other issues were the lack of time and a complete lack of consultation with the fishing industry.

 

“Why would any business personality buy uncaught and unprocessed fish from a middleman at prices that exceed the commercial value of processed fish on the international market? The fishing industry did not participate in the auction because none of the players would wilfully bankrupt themselves,” he said.

 

The commercial value of the 72 000 tonnes of horse mackerel at N$14 600 per tonne could have generated revenue of N$1.05 billion, of which the Namibian government would have received N$458 million.

 

The commercial value of the 11 000 tonnes of hake at N$45 000 per tonne could have generated N$495 million in revenue, of which the Namibian government would have received N$165 million.

 

The commercial value of the 392 tonnes of monk fish at N$49 000 per tonne would have generated N$19.4 million, of which the government’s share would have been N$5.5 million.

 

The total revenue for the Namibian treasury would have been N$628.5 million, which is N$600 000 more than the N$627.9 that the bidders during the first round of the quota auction offered.

 

“It comes down to economic sabotage and the wilful destruction of the existing fishing industry. No foreign investor will ever set foot in the Namibian fishing industry again and thousands of jobs will forever be lost,” one stakeholder said.

 

Other players in the fishing industry were of the opinion that the tax and foreign currency revenue could have been as high as N$2.6 billion if quotas were allocated as it should have been to existing companies with their various beneficiary partners.

 

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