Accra, Feb. 24, GNA – The Winneba Eyipey Co-operative Fisheries (WECF) and the Business Sector Advocacy Challenge (BUSAC) Fund, is calling for Government-guarantee credit facilities to support the local fishing industry in the Awutu District.
Mr Paul Oduro Frimpong, Executive Director of the Society for Managing Initiatives and Leadership Enhancement, Ghana, a non-governmental organisation, which is partnering BUSAC Fund, made this known to the Ghana News Agency in Accra on Friday.
He said WECF is asking the Government to introduce policies to address issues of market failure through capacity building and the creation of a framework for the establishment of a district specific fishing support fund for the Assembly.
Mr Frimpong said it was expected that government interventions would create an enabling policy, legal and regulatory environment to facilitate the development of various financial markets to assist the fishing industry.
WECF appealed to the commercial banks to design new approaches for reaching out to the fisheries sector and develop systems and processes that would help the players to understand the dynamics of the Ghanaian fishing industry better and design appropriate products for the sector.
Mr Frimpong also expressed the need for linkages with microfinance institutions to facilitate increase financial outreach.
He said seeking medium- to long-term financing from financial institutions remained the major obstacle for the industry.
Mr Frimpong said some financial institutions claimed that lending to the fishing industry involved significant transaction costs due to the small amounts of credit, which required large amounts of time or effort, cumbersome administrative procedures, lack of understanding of fishing needs, inability to assess creditworthiness, poor financial information, unreliable accounting and unrealistic business plans.
“Additionally, some of the factors that have discouraged financial institutions from lending to fisheries industry include, poorly compiled records and accounts, especially audited accounts, low level of technical and management skills, outdated technologies with few economies of scale and unacceptable rates of return, lack of professionalism and networking, lack of collateral, lack of market outlets due to poor quality and non-standardised products, poor linkages with large scale enterprises and limited knowledge of business opportunities,” he said.
Mr Frimpong observed that some banks were hesitant to provide financial assistance due to factors such as limited range of financial instruments and lending conditions, banks’ risk-averse behaviour; preference for investing in other low-risk sectors, non-performing assets, which made the banks too cautious to undertake further lending.
He noted that fishing played a major role in sustainable livelihoods and poverty reduction, in the coastal communities.
Mr Frimpong said according to the Ghana Statistical Service and the 2008 Budget, the fishing sector contributed 3.9 per cent of the nation’s Gross Domestic Product (GDP) and 11 per cent of the Agriculture GDP with about 75 per cent of total annual production being consumed locally.
He however emphasised that the sector had recorded persistent decline in terms of output over the years adding that technology used in fishing in Ghana had not kept pace with developments in other sectors.
Mr Frimpong blamed the situation to lack of sector specific funds to support the industry, coupled with challenges in accessing credit facilities from financial institutions as well as the enforcement of the Exclusion Economic Zone and large-scale poaching by foreign vessels in Ghana’s waters.
This he said had significantly depleted fish stocks in Ghana’s 200-nautical-mile maritime zone.