- Causes massive revenue losses
- GDP contribution nears insignificance
- Fishing stock face complete collapse
Illegal, unreported and unregulated (IUU) fishing in Ghana is not only a serious threat to the ecology of the oceans, but also denies the country much needed tax revenues which can be used to stimulate economic growth and delivery of poverty alleviation projects.
According to an Organisation for Economic Cooperation and Development (OECD) study titled Better Policing for Development 2014 Policy Coherence and Illicit Financial Flows, the fisheries sector is of strategic importance to many countries but remains vulnerable to a wide range of tax crimes and other transgressions – including money laundering, corruption, drugs and arms smuggling.
In Ghana, more than 10 percent of the country’s 28 million population are said to be engaged in the fisheries sector – the greater part of the people dependent on fisheries are artisanal fisher-folks and fishmongers, according to the Ministry of Food and Agriculture.
But despite this huge number of people employed by the fisheries sector, the industry’s contribution to the country’s GDP for more than a decade has been nothing but disappointing.
The sector, according to Ghana Statistical Service (GSS) contributed 2.5 and 2.3 percent to GDP in 2009 and 2010 respectively. It however tumbled to 1.7 % of GDP in 2011 and has since never recorded any figure above that. Currently, its contribution to GDP is at a paltry 1.2 percent from the 1.1 percent recorded in 2016, clearly reflecting a sector that is in terrible distress.
While several reasons can be attributed to this poor sector performance, there seems to exist an illegitimate business that mostly takes place on the high seas between large foreign fishing vessels and local fishermen that renders the country poorer via unpaid taxes and appropriate fees to government agencies.
At the centre of the sector’s poor performance is a practice called ‘Saiko’, which is a form of illegal, unreported and unregulated (IUU) fishing conducted by local fishers who go out in canoes to meet foreign vessels and transport boxes of frozen fish to buyers who mostly wait on shore.
The business of Saiko
Saiko is a Japanese word to refer to something which has no use. It came about when Japanese fishermen whose nets first caught fish other than what they were licenced for referred to the unplanned catch as ‘Saiko’.
According to Godfrey Tsibu, Deputy Director of the Fisheries Commission, fishing vessels are licenced according to the sort of fish they intend to catch.
But occasionally these vessels catch different types of fish which the law requires must be discharged back into the ocean unharmed. As such catches originally did not have commercial value to these vessels, they initially started giving them out to local fishermen who wanted them free of charge – but as demands of the fishermen grew, they started selling the unwanted fish.
Fisheries economist with the United Nations University and University of Ghana, Prof. Wisdom Akpalu, said as the demand of local fishermen increased, some of the vessels made it a business wherein they would consistently deliberately catch these fish, freeze them and later sell to local fishermen on the high seas – which is illegal in itself and by extension denies the country taxes it would have made on those sales had the transactions been supervised by tax authorities.
The saiko catch are mainly juvenile small pelagic, such as sardines, chub mackerel and other juvenile demersal fish as well, as it is seen to be an assured means of harvest in the face of declining catches.
The Fisheries Act, 2002, for the purpose of yielding the right taxes among other things for the state, prescribed that fishing vessels must submit a record of their catch – on failure of which the fishing vessel will have its licence either cancelled or refused renewal or suspended.
Transshipment is an illegal transaction wherein large foreign fishing vessels sell fish or cargoes to Ghanaian vessels, boats and canoes at sea, and in this way avoid berthing at the authorised ports and thus evade payment of taxes to government.
The OECD 2014 reports states that this sector is vulnerable to financial crimes – including in particular the use of offshore companies and flags of convenience to hide beneficial ownership of fishing vessels; and there is frequently a lack of effective cooperation between agencies responsible for regulatory fisheries policy, administrating taxes and law enforcement.
The Deputy Director of the Fisheries Commission, Mr. Godfrey Tsibu, recounted how this practice of transhipment or Saiko conspires to deny the country millions of dollars in tax revenue.
Although it is not clear how much the country loses each year due to transhipment, nevertheless the data from GSS on the fisheries’ contribution to the economy could tell the impact of this illegal practice.
The fishing subsector since 2006 has contributed less than 3 percent to the country’s economy, according to (GSS) data.
The complexity of payments, according to the OECD report, adds to difficulty in carrying out audits and investigations in this area.
Cephas Asare, in his article titled Illegal Unreported Unregulated (IUU) Fishing: The Saiko Story, written last year, stated that the global losses due to IUU fishing alone are estimated to be as high as US$23.5billion per year – with West African waters including Ghana deemed to have the highest levels of IUU fishing in the world, representing up to 37 percent of the region’s catch.
The impact of such illegal practice on government revenue is backed by a report prepared by Greenpeace, a US-based environmental NGO, which stated in a report published in 2017 that the practice threatens the livelihoods of millions of people who rely on healthy fisheries, and cheats governments of billions of dollars in revenue.
According to a recent study by Frontiers in Marine Science, the West Africa region (coastal countries) loses an estimated US$2.3billion annually to illegal fishing.
The problem has become so severe that it is threatening food security in the region, the environmental group said in its report.
“Fish stocks are not restricted to national boundaries, and that is why the solutions to end the overfishing of West Africa’s waters can only come from joint efforts between the countries of the region,” Ahmed Diame, Greenpeace’s Africa Oceans campaigner, said in a statement.
Both international and regional vessels are guilty of contravening existing regulations, Greenpeace found during a ten-week surveillance voyage from February to May, 2016.
It documented a number of illegal, unregulated, and unreported fishing practices off the coast of West Africa. After boarding 37 fishing vessels, the group found evidence of infractions which were carried out by vessels with Chinese, Italian, Korean, Comoros, and Senegalese flags.
This story was produced by the Business and Financial Times. It was written as part of Wealth of Nations, a pan-African media skills development programme run by the Thomson Reuters Foundation.