Undervaluation costs fishing industry $23.7m yearly

Ghana is losing up to $23.7 million in the fishing industry every year through undervaluation of fishing licence fees and soft fines for trawlers operating illegally in local waters, a report by the Environmental Justice Foundation (EJF) has revealed.

Apart from pegging licence fees at the lowest rate in the sub-region, Ghana also accommodates large trawlers run by mainly state-controlled Chinese corporations that avoid the appropriate licensing regime through intermediaries that front for them, the report by the non-governmental organisation said.

Besides, fines for illegal fishing are often below even the minimum threshold stipulated by Ghanaian laws, it further stated.

The report, expected to be made public today, is the latest work by the NGO that investigates suspected intrusion and illegal activities in Ghana’s fishing waters.

“Ghana’s licensing fees are substantially lower than other coastal states in the region, and comparisons suggest Ghana could generate an additional $2.4-$6.7 million every year by increasing its fees for foreign trawlers to similar levels to its neighbours,” the EJF said in a statement.

Grave risk

EJF’s Executive Director, Mr Steve Trent, said: “There is a grave risk that Ghana’s fisheries will soon collapse, impacting the livelihoods of over 2.7 million Ghanaians. Safeguarding the country’s fisheries requires urgent intervention at high levels of the government to introduce reforms that improve transparency, so it is clear who is benefiting from fishing access, what and how much they are fishing, how much they are paying and what these funds are used for.

This failure to set reasonable fines and fees not only results in a considerable loss of revenue, but presents a critical threat to the sustainability of the fishery industry, and in doing so endangers national food security and countless livelihoods”.

The report said an estimated 90 per cent of the Ghanaian trawl fleet was owned by Chinese corporations although foreign ownership or control was banned.

These corporations, it said, operated through local ‘front’ companies using opaque corporate structures to import their vessels, register and obtain a licence to fish in order to circumvent the law.

“The fact that these vessels are registered as Ghanaian seems to be the justification for low licence fees and fines well below the statutory minimum. However, information on true ownership reveals this is misguided,” the report said.

Licensing fees

In 2020, Ghana increased licensing fees from $35 to $135 per gross register tonne (GRT) per year, meaning that the annual licence fee for an average 200 GRT trawler was around $30,000 compared to around $119,000 per annum for a foreign trawler of the same size operating in Guinea.

The figures look even more ridiculous given that a single state-owned Chinese company with trawl operations in Ghana reported an operating revenue of around $164.5 million in 2019, while receiving subsidies of around $3.0 million for the development of its overseas fishing operations in that year.

By implementing the same fees as Guinea, the report said, Ghana could reduce trawler numbers from 75 to 10 vessels and yet double revenue generated through licensing fees in 2018.

“As well as increasing state revenue, this would address the worrying over-capacity in the fleet, providing massive benefits to the country’s struggling small-scale fishery, which supports jobs and food security for millions of Ghanaians,” it added.

Unimpressive fines

“Fines given out for illegal fishing and other infringements are also much too low. They regularly fail to meet the minimum sums laid out in Ghana’s own legislation, and do not meet Ghana’s responsibilities under international law. Not only has this resulted in unrealised revenue of around $12 million in 2015 and $17 million in 2018; it is failing to deter such offences,” the report said.

“Trawlers have engaged in widespread illegal fishing in Ghana’s waters, failing to report huge catch volumes to the state, and decimating the small pelagic fish populations which are reserved for local communities, the statement added.

The report identified several cases of alleged illegal fishing in Ghana linked to two Chinese state-owned corporations in receipt of government subsidies, and further cases of alleged illegal fishing linked to a second Chinese state-owned company.