NOMQHELE DUBE AND TANAKA CHIGUVARE: SA fishing industry poised for growth amid global decline

The global market value of fish production is estimated to be about R4.1-trillion a year. SA has a coastline of more than 3,000km, and though small compared to other sectors, the domestic fishing industry plays an important role in the country’s economy, contributing at least R7.9bn to annual GDP.

The fishing economy provides employment opportunities for about 58,000 South Africans and is a sizeable source of foreign exchange, as the country is a net exporter of fish and fish products. In 2022 SA’s fish exports were valued at more than R7bn, the largest export markets being Spain, Italy and Hong Kong.

SA has a rich and diverse marine ecosystem with more than 10,000 recorded marine plant and animal species, including vital habitats such as estuaries and mangroves. To preserve the sustainability of the industry, the country enforces the Marine Living Resources Act, which regulates fishing activities and safeguards marine biodiversity. 

The fishing industry consists of two main subsectors, deep-sea trawling and aquaculture, both of which are concentrated in the Western Cape. The province accounts for 71% of total employment in the sector. The presence of leading companies such as Sea Harvest and Oceana, which each employ 4,000-5,000 employees, can be considered a contributing factor to this achievement.

SA’s hake fishery sector is the dominant sector in the Western Cape, accounting for about 80% of the total catch. Hake from SA is in high demand worldwide because it holds the certification of the Marine Stewardship Council, the foremost programme for endorsing sustainable wild-caught seafood. 

When it comes to both the value and volume of revenue, Sea Harvest and Oceana Group are the two top players in SA. Sea Harvest, with a market capitalisation exceeding R5bn, is the biggest fishing company in the country. Oceana, with a market capitalisation of more than R10bn, is the second-largest fishing company in SA. The company specialises in hake, pilchard, and anchovy fisheries and has operations in Namibia and Angola.

Oceana Group and Sea Harvest are top investments in Brimstone Investment Corporation. Apart from specialising in hake, prawn and abalone fisheries, these companies also have a retail division that supplies seafood products both domestically and internationally. 

The Covid-19 pandemic had a big effect on the fishing industry, with disruptions to supply chains negatively affecting catch, exports and seafood product sales across the main markets (including Europe, th’US and Asia). The closure of restaurants and hospitality establishments, which are big consumers of seafood, has also affected the fishing industry.  

Overfishing is another challenge in SA’s fishing industry, with some fish stocks being fished at biologically unsustainable levels. The UN’s Food & Agriculture Organisation estimates that about 34% of fish stocks are trawled beyond sustainable levels, and another 60% are being sought at their largest sustainable limit. This threatens the long-term sustainability of industry and the livelihoods of those dependent on it. Overfishing can lead to the depletion of fish stocks, and loss of biodiversity. 

However, the development of new markets for seafood products presents a growth opportunity for SA’s fishing industry, which at present depends heavily on conventional markets, Europe and Asia. Nevertheless, the industry has the potential to expand into untapped markets, including the rest of Africa, the Middle East and South America. This will require the negotiation of new trade agreements, forming partnerships with local distributors, and launching targeted marketing campaigns to promote SA seafood products. 

Other growth opportunities in SA’s fishing industry are aquaculture, commonly known as fish farming. This sustainable method of producing high-value seafood can help alleviate pressure on wild fish stocks. SA has already established abalone production farms in the country, primarily exporting to top markets such as China and the UK. A sizeable part of the total catch in the fishing industry is attributed to the hake fishery, making it the leading player in the sector. Therefore, diversifying into new fisheries is another opportunity for growth in SA’s fishing industry.

There is potential for further expansion, particularly in other species such as salmon, trout and mussels. This would necessitate investment in aquaculture infrastructure, research & development, and regulatory frameworks to support the growth of this sector. Though it would require investment in new fishing vessels, equipment and technology, as well as research on the sustainability and market potential of these species, there are other fish species in SA waters that could be targeted, such as tuna, swordfish and squid.  

The growth of SA’s fishing industry is influenced by technological advancements. These advancements comprise the use of satellite technology to monitor and track fishing vessels, the use of acoustic cameras and echo sounders to evaluate fish stocks, and the use of automated processing equipment to enhance efficiency and reduce costs.

By reducing catch, minimising overfishing and optimising fishing operations, these technologies can promote the industry’s sustainability. For the fishing industry to take full advantage of technology’s potential it will need to invest in research & development of innovative technologies and provide training for industry personnel. 

To fully realise the potential of the fishing industry, the SA government has identified it as a critical sector for economic growth and development and has proposed various initiatives to achieve this goal. These initiatives include financial relief packages for the industry during the Covid-19 pandemic, as well as regulatory measures to ensure sustainability and responsible fishing practices.

The department of forestry, fisheries & the environment has set a target to expand the aquaculture industry in SA significantly and establish its crucial role in fish product supply, job creation and contribution to national income and rural livelihoods through Operation Phakisa.

The plan aims to achieve specific targets over five years (2019-2024), including increasing the sector’s revenue, generating 6,560 new direct jobs, producing an additional 27,020 tonnes, and promoting increased participation to support transformation in the industry. 

• The authors are analysts at Johannesburg-based research and strategy firm Birguid.