Africa’s Blue Economy, a frontier for prosperity?..a spotlight on Eastern Africa

Thousands have lived without LOVE, not one without WATER.” so goes the saying. Africa is surrounded by two seas (the Mediterranean and Red Sea) and two oceans (the Indian and Atlantic oceans). 38 ?African countries are coastal states, with the ocean supporting 90% of the continent’s trade, exports, and imports. It gets even better that in 2018, the Blue Economy (BE) generated nearly US$300 billion and supported 49 million jobs, but there are more intrinsic values derived from BE including food, biodiversity, and resilience to the effects of climate change.

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For a sector that is worth over 3 trillion USD annually, why is the continent punching below its weight?

In the African context, BE?is defined as holistic and integrated management and governance of ocean, aquatic and marine ecosystems for the sustainable economic exploitation ?and the conservation of supporting ecosystems.

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But let’s?look at why I ?think the continent can be ?a global leader in BE, with a focus in the Eastern Africa region.

• Somali has the longest coastline in Africa, about 7,000 km, a huge water mass for fisheries.?But that’s as far as the good news goes. Most reports indicate that over the past 3 decades, the nation has lost over 2.4 million metric tonnes of fish to foreign fleets trawling off its waters. Therefore, this natural wealth is yet to be?fully exploited to create prosperity for Somali citizens. Besides,?there is no single Marine Protected Area in the country.

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• Lake Victoria shared between Kenya (6%), Tanzania (49%) and Uganda (45%) is the second largest freshwater lake in the world, producing 1 million tons?of fish annually, and employing?around 3 million people in fisheries?directly-?The lake is rich in Tilapia?(13%), Nile Perch?(26% and Lake Victoria Sadines at (42%). In Kenya,?Lake Victoria?is responsible for 67% of total annual fish production. Yet the lake region is home to?some of the poorest communities. My birthplace is in Siaya, so this message hits closer home. Why has this huge resource never fully uplifted the welfare of the natives through better investment in cold chains, value addition, water transport modernization, control of invasive water hyacinth which now covers about 26% of the lake blocking access to fishing grounds and creating dead zones in Lake Victoria where nothing else thrives. How about the immense opportunity for aquaculture??Kenya’s annual fish consumption is about 500,000 metric tonnes against a production of about 180,000 metric tonnes. The deficit is imported from China, Norway, and Tanzania.
• Rwanda has 101 lakes; DRC more than 60, Kenya 64. Several of these lakes are transboundary including Kivu, Jipe, Nyasa, Tanganyika, Albert, Amboseli, and Chala.?Tanzania boasts the second deepest lake in the world, Lake Tanganyika. And nearly 16 million Tanzanians depend on coastal resources for their livelihoods,

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• In DRC Congo, The Great Inga Dam can produce up to 43,000 MW of power, essentially enough electricity to power the entire Sub-Saharan Africa. However, it?operates?below capacity of less than 1,800MW. Approximately 90% of Kenya’s grid electricity?is from renewable/clean energy sources. Of these, geothermal remains the most significant producing 985 MW against an estimated potential of 10,000?MW.?How about opportunities in the blue renewable energy, such as offshore wind, floating solar panels, tidal energy, and wave?energy yet to be explored in East and indeed Africa as a whole?

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Here are my food for thought as we step into a brand new year, 2025

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1) Conduct Marine Spatial Planning?(MSP). MSP?will help in organizing economic activities vis a vis the marine resources available.?Kenya and Tanzania have made progress in their MSP but are not operational. In recent pleasant news, the Kenya Marine and Fisheries Research Institute (KMFRI), the national research institution in Kenya for Fisheries, ?will be taking further steps in a comprehensive ??Marine Spatial Plan to drive marine and coastal sustainability and investment opportunities?in the Kenyan Coast. KMFRI’s MSP?will include Kenya’s Exclusive Economic Zone (EEZ), ?a 200 nautical mile area of the sea, seabed, and subsoil extending?beyond the country's territorial waters and the country’s coastlines. KMFRI is also looking at climate vulnerability assessments and projections, which will ascertain, for example, how shoreline changes might affect mangrove ecosystems (important for coastal health) over time. Digital Earth Africa The rest of the?countries must embark on a similar exercise, ?mapping their aquatic resources, which is streamlined and dovetailed with national and regional agendas.

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2) You can’t manage what you can’t measure. No country in EA has undertaken a comprehensive Blue Accounting. ?Rwanda and Tanzania are in the early stages. Blue Accounting ensures we attach economic value to each of the resources?therein.?UNECA Blue Economy Valuation Toolkit?provides methods and tools to assess the economic, social, and environmental dimensions of the blue economy. It?evaluates the contributions of blue economy sectors to GDP, job creation, and social welfare, and helps capture changes in stocks of natural capital and ecosystem services.

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3) What about Laws and Policies? All good plans and ambitions fall at the altar of poor governance as we have seen many times closer home. Appropriate laws will create conducive frameworks, and institutional capacities, streamline stakeholder engagements, and integrate collaborations for transboundary resources?and programmes.?Many territorial conflicts remain unresolved for example in Migingo Island where Kenyan fishers get arrested ?by Uganda police for ‘trespass.’?

?Well-thought-out laws will streamline;

• ?Transboundary resources and define inter countries' partnerships
• Plastic Elimination and National Marine Litter Policy
• Tourism Development
• Marine Fisheries, Aquaculture and Fish Processing
• Local government ?and stakeholders Capacity building mechanism
• Monitoring, Assessment, and Management of Ocean Health
• Marine Biotechnology and Bio Prospecting
• Marketing and Financial Inclusion for Fishery
• Emerging Technologies

An example of knee jack policies is the recent gazettement of new regulations?by the Minister for Mining, Blue Economy, and Maritime Affairs,?in Legal Notice No. 126, set to take effect on January 1, 2025.?In the new regulations, the minister has imposed?a Sh 50,000 licensing fee on all aquaculture establishments operating in?Kenyan waters, regardless of the size?of the business?coupled with a 5% ad valorem fee on the value of landed fish. This will increase the cost of doing business within the sector?and cripple the fragile aquaculture sector. For a good measure, The Lake Victoria Aquaculture Association (LVA) has filed a constitutional petition at?Kenya’s ?High Court, Nairobi seeking to suspend the implementation of the Aquaculture Regulations 2024. A better approach is a comprehensive consultative review to accelerate gains made in this sector, not a mere quick tax grab as we often see in recent law changes aimed at increasing Government revenue.

4) Science to Business

What is the role of science in developing viable sustainable businesses that meet the needs of people and the planet? ?Scientists and businesses continue to operate in silos. There are many gray areas that require more research to unlock their full potential. On the other hand, we have several academic research that never have commercial possibilities. Marine Biotechnology and Bioprospecting?have?already proven to benefit us?through the development of pharmaceuticals, cosmetics, and several diverse products.??How can science and business work more closely and in particular, ?institutions like Kenya Marine and Fisheries Research Institute (KMFRI) OFFICIAL and Tanzania Fisheries Research Institute (TAFIRI) be at the driver's seat in spearheading this ambition? GIZ SPARK is already leading this conversation and recently hosted a design workshop on the same at our annual Blue Economy Summit in Mombasa.?

5) Support to small businesses and startups

Small businesses are the engines that are building the tools, services, and industries?to prosper Coastal communities as well as become more resilient to the climate crisis,”?These businesses are also the centers for innovations and creativity. Should we not encourage the emergence of more blue incubators and accelerators in Africa? Notable examples today are

Sote Hub in #Kenya and OCEAN INNOVATION AFRICA in #SouthAfrica are at the forefront of blue innovations, supporting early-stage development and the emergence of more businesses and startups in this sector. These early-stage businesses will need resources, mentorship, and funding to bring their products into the market.?In Kenya, some startups already making big waves whom I have been privileged to work with include Rio Fish Ltd Kuza Freezer | Beyond Refrigeration. Mega Gas Alternative Energy Sea Earth Organic, EBIKES AFRICA Caino Africa Sea ventures and others. Aquarech in Kenya recently raised about $ 2.2 million?to hire talent, acquire more feed, and set up infrastructure to support more vertical integration of their technology in an investment led by ?Aqua-Spark, with contributions from Acumen Katapult & Mercy Corps Ventures

The hubs and private sector not only link investors to startups and innovators but also play a role in providing bankable projects for ocean development through continuous forms of collaboration, market accessibility, technology transfer?, and global cooperation.?A ?number of investors still shy from putting their money into BE startups. They mention the lack of enough data and information but also the lack of bankable projects. We have to narrow that gap.

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6) Where is the Money???The majority of blue enterprises can hardly sail, always held back by the increasingly hostile funding environment including high interest rates and rigorous due diligence requirements by commercial banks. ??Is there an opportunity to set up a National Blue Economy Fund (NBF)?in each country???Most donor projects over-focus on capacity building at the expense of access to funding. Could we tie future BE-related projects to say an investment into an established endowment fund- NBF ?to support businesses? How this works is that for every new project launched, some budget must be set aside by the NGO/INGO to be channeled into an endowment fund where qualified blue businesses access loans and grants. We can’t move a sector forward by boot camps and seminars. A more holistic intervention should lead to investments and market access. ?

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Additional alternative but innovative funding options include;

• Payment-for-ecosystem services (PES) -
• Blue Carbon
• Blue bonds. ?#Seychelles?was the first country globally to float a blue bond in 2018- raising $ 15 million and a $ 5 million guarantee fund from 世界银行 World Bank and another $ 5 million?concessional loan from the @Global Environment Facility (GEF). This funding enabled Seychelles to increase their Marine Protected areas to 30% as was planned among other socio-economic benefits to the country. While Seychelles has received many accolades for its bold step, ?one of the goals of triggering follow-up private sector investments in the sector has not materialized. The lesson learned here is how we integrate private investment to be at the center of the bond framework instead of the current model which is more public sector driven.

As observed by Nagisa Yoshioka, Hsing Hao Wu, Michael C. Huang, and?Hajime Tanaka?in their paper, ?How blue financing can sustain ocean conservation and development: A proposed conceptual framework for blue financing mechanism; Issuers such as sovereign states invite the private sector to purchase blue bonds. Development banks or global funds guarantee the return. Issuers then commit to projects that contribute to ocean sustainability in the short term, such as marine plastic debris reduction, ocean preservation, and coastal resilience building, as well as blue carbon projects. Development banks and other actors, including NGOs, intergovernmental organizations, and public-private partnerships (PPPs), support the implementation of these projects.

A well-managed ?National Blue Economy Fund (NBF)?can initiate?and support cross-cutting projects and be a game changer. For example, it will facilitate;

• Blended finance, loans, and grants to bankable Startups, and blue enterprises in value addition, processing, ?manufacturing, technology, and others
• Capacity building and human resource development for community projects and blue ambassadors at the local and national level
• Shipbuilding, ship repair
• Maritime infrastructure
• Port equipment and services
• Technology development?and integration of AI and other emerging technologies.

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Our organization Sote Hub is a strong voice in the blue economy in Kenya and Tanzania over the last five years and we have been privileged to implement some of the most innovative Blue projects including being part of the Go Blue project funded by Delegation of The European Union to Kenya through 德国国际合作机构 supporting 340 blue enterprises and currently Elevate Blue https://elevate-blue.com/??funded by #Norad where were are collaborating with TechBridge Invest and MTI Investment AB to support 500 enterprises in Kenya and Tanzania in the next three years. ?So we have been in a position to make meaningful contributions to a sustainable and prosperous Blue future including our annual Blue Economy Innovation and Investment Summit, one of the largest gatherings of scientists, blue entrepreneurs, investors, donor agencies, government and private sector every October in Mombasa. ??https://blueeconomysummit.co.ke/?

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In my recent visit to #Algiers, Algeria attending the Startup Africa Conference, December 5-8, I was glad to meet a team from Expertise France to discuss synergies between Kenya and Algeria. They have been working for the last three years on an initiative to contribute to the economic development of Algeria ?BE, particularly in the fisheries, aquaculture, entrepreneurship, research, and innovation-

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Parting shot

BE cannot be a showbiz, or a buzzword,?and more conferences & workshops, but rather having the right?talents?in our institutions, backed with the right policies, resources, and plans.

Individual African countries must craft their vision?and shape their blue future. Only then can this sector take its rightful position- to contribute to ?Africa’s Agenda 2063 ambition… of having her citizens free from the chains of poverty via an?inclusive and sustainable BE transformation. A shiny example is Sychelles who took action. Is it a coincidence it’s the country with the highest GDP per Capita of about $ 20,000 in Africa and is ranked the richest in the continent? This is when compared to most SSA countries with a GDP per capita average $ 2,000. Food for thought? ?

As observed by Franklin D. Roosevelt, A smooth sea never made a skillful sailor. In the rough waves and turbulence of storm,?we find our true direction.?Africa must keep sailing.

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Are you working in the BE sector in Africa or plan to implement in the near future? How can this sector truly work for us, please share your thoughts, and let’s connect.

**Disclaimer: Views are mine and are not the official position of any mentioned institution