The Costs and Benefits of Fisheries Management in Malawi

The fisheries sector is very important to Malawi’s economy, livelihoods, food security and biodiversity. One estimate puts the total contribution of the sector at 7.2% of GDP while employing 700,000 people either directly or indirectly. Unfortunately, there is evidence of extreme overfishing, with 50% more craft than should be the case for maximum sustainable yield. Almost 90% of all nets used are illegal, with mesh sizes that are too small, capturing juvenile and spawning fish which curtail the reproductive capacity of fish species. This paper estimates that in 2018, profit from the fisheries sector was more than 5 times larger than the expected profit at maximum sustainable yield. These unsustainable profits cannot last forever, and will likely come at the expense of an imminent collapse in the fisheries stock if unaddressed, as evidenced by the reduction and possible extinction of the once prolific chambo species in Lake Malawi. The recommended intervention is to initiate a fishing by rotation policy. The upfront costs involve painting the boats to designate which days they are allowed to fish (MWK 0.3 billion), plus foregone revenue in the first year (MWK 164.3 billion). However, this would reduce effective fishing effort down to 2,475 ‘full time’ craft (from 18,000 currently) and avoid a drastic reduction in the fisheries stock. In the long run this would lead to an extra MWK 53.7 billion in sustainable revenue and ongoing fishing costs of MWK 4.4 billion per year. For every kwacha invested the return is 2.8. In contrast, replacing the illegal nets does not pass a cost-benefit test. This is because the upfront costs of the intervention are very large – more than MWK 91.1 billion to replace the nets, plus foregone (unsustainable) revenues of MWK 180.1 billion for one year. Importantly, the intervention still leaves 18,000 vessels in the waters of Lake Malawi and surrounding water bodies, striving for the same limited pool of fish. While revenues are MWK 55.4 billion, large operational costs of MWK 32.5 billion are also incurred annually.