DRC buys auction surplus horse mackerel quota

DRC’s finance minister concluded the purchase of a quota that was left after a governemnt inntiated auction.

20 September 2021 | Ministries

Derek Klazen; Fisheries minister; “The industry is interdependent on the DRC as its biggest client.”

Walvis Bay

The national economics minister of the Democratic Republic of Congo (DRC) Jean-Marie Kalumba Yuma concluded a deal to purchase a governmental objective quota of horse mackerel from the Namibian government today.

Kalumba Yuma arrived in the country on Sunday amidst rumours flying about that the ministry of fisheries and marine resources sold a 27 300 metric tonnes horse mackerel quota to the DRC, allegedly over a two-year period, with the option to renew it for another five years.

Industry players are accusing the ministry of giving away Namibian resources to its main market and disrupting prices to the disadvantage of Namibian fishing entities and traders.

Speaking on the evening before his meeting with Kalumba Yuma, Namibia’s fisheries minister Derek Klazen said that such rumours are unfounded.

“We must remember that the auction of fishing quotas is a government directive with the intention of strengthening developmental drives within the regions. The auction fish that remained was held as reserves,” Klazen explained when asked to shed light on the allegation levelled against the ministry.

At the time of the auction, some industry players reasoned that it was already late in the season and therefore did not submit bids. Many had also already signed partnerships with new rights holders.

Seaflower Pelagic initially bought 15 000 metric tons and then recently acquired another 5 000 metric tonnes of the 32 000 metric tons that remained after the initial auction process.

Klazen pointed out that the DRC, with a population of over 89 million people, is Namibia’s biggest market for landed horse mackerel.

“The industry is interdependent on the DRC as its biggest client.”

A new way

A well-placed source in the office of the minister said that it appears as if certain players in the industry are simply angry as the deal would result in a new way of doing business.

“The DRC government previously purchased horse mackerel from industry players through agents that at times inflated the price,” he explained, pointing out that Lebanese agents for example import horse mackerel destined for the DRC after it is landed by truck from Namibia, via Zambia.

“At the end of the day, they pass the fish off as if it’s being produced/processed in Zambia and therefore sell it at a different price. When the fish arrives in the DRC, the price is overinflated. Technically this scenario has become unaffordable for the DRC to maintain.”

According to this source, the DRC government prefers Namibian landed horse mackerel.

No contract yet

The source also refuted insinuations that there was a previous contract in existence between the ministry and the DRC government.

He emphasised that the notion of a 2-year contractual agreement with the DRC does not make any sense.

“It cannot be a two-year contract as the auction applies to one season – from January to December. However, it is up to the DRC government to go into an agreement with a company to catch the fish and establish a contract as determined by them. Once the fish is sold and paid for, it belongs to and becomes the property of the DRC government.”

According to the source, local operators did not participate in the auction with the expectation that the quota would eventually be allocated for free.

He added that the current business model is unsustainable.

The source also said that the DRC government would need a company to catch the quota it purchased by means of the auction.

“Local players are not interested, since prices will be affected and drop. We initially offered 87 000 metric tons and the 27 300 is a residual quota that was up for sale. Government decided to take charge to safeguard the interest of the Namibian population at large. We will generate an estimated N$85.715 million from the 27 300 tons of freezer horse mackerel through this deal.”

How will they do it?

According to an industry insider, the Angolan bilateral deal linked to Fishrot was fashioned on similar principles.

He said the question that remains is who will be able to land the 27 300 metric tons of fish before the end of December, and if it’s not landed, what will happen.

“Are they protecting the DRC at the expense of Namibian fishing industry and economy? The auctioned quota is what a standard midwater trawler catches for a full year and the season ends in December. What is the actual plan and are there other arrangement in terms of the future? Does the DRC have the catching capacity and what will the arrangement be? Will the DRC government continue buying from the auction quota? Will they bring their own fleet and employ Namibian fishermen? Are other players being pushed out?”

He added that there is already pressure on the stock, with horse mackerel catches being exceptionally poor.

“Vessels are currently struggling with catches. If the quota is not caught, what will the implications be on the relations between the DRC and Namibia, since the former has paid for the quota? The Marine Act does not allow for the rolling over of the quota from one fishing season to the next. The quota was part of the TAC that was set for 2021 and can’t be rolled over.”

The source expressed surprise that government proceeded with this deal knowing that the DRC would not be able to catch the auctioned quota before the end of December 2021.