Figure 4.14 Future fisheries cluster and linkages

of fish sold locally. In the past fish used to be trucked by road in refrigerated vehicles from Kiunga to Mokowe, but this ceased due to insecurity and the road has since deteriorated. Improvement of security along the Kiunga –

Mokowe road link could revive the link as a viable route to market and warrant investment in its rehabilitation; > Once landed at Lamu or Mokowe, fish is usually sold directly to local restaurants and hotels or retail at open air markets or on the sea front by traders. Hotels create local niche markets with specific customer preferences requiring some form of primary processing. This typically takes place at landing sites where filleting, drying or smoking happens before being directly marketed to hotels and local markets.

The use of ice at these domestic markets is little and fish stock is prone to high spoilage levels. Lamu’s Integrated

Transport Masterplan recommends the upgrade of Langoni and Wiyoni jetties to cargo jetties (along Lamu Town), the provision of cold storage and pre-processing facilities will also be needed. Similar provisions will be needed at Mokowe; > Fish landed at Mokowe is sold to local markets ion Lamu mainland or trucked to other parts of the country such as

Mombasa for sale. Temperature-controlled trucks would be need to collect the fish and transport it to markets from the proposed fish processing plant VC (section 4.3.4). Good road access will be required to landing sites along the mainlan; and > A good public transport connection will be needed to the collection centres for both the fisherfolks and traders from other areas delivering or buying products at the collection centre. A ferry service along the water route would be preferable.

Figure 4.14 Proposed fish collection centres

Majengo

Hindi Mtangawanda

Kizingitini Pate Island Siyu

Shangarubu

Lamu Port

Mokowe

Matondoni Lamu

Kipungani Manda Island

Source: Atkins analysis

Kiwayu Kiunga

Legend

Fish Collection Centres

Water Routes

Port Access Channel

4.3.4 Priority VC fish processing to catalyse development

This VC project is for the establishment of a processing facility for fish and crustacea, together with supporting infrastructure development such as improving key landing sites and cold storage (section 4.3.2.1).

In addition to the substantial employment opportunities including scope for employing special interest groups (SIGs), the benefits of the project include:

> Improved and stable prices for fisherfolk, supporting investment in boats and equipment; > Providing a steady off-take for pond fish farmers and mariculturists, supporting investment and expansion of these activities subjecto to protecting mangroves; > Reduction in post-catch losses by providing an outlet for excess catch (particularly needed in March); > Supporting the potential for other fish processing activities; > Providing a commercial platform for:

> branding and marketing Lamu fish and crustacea; > providing sharia-compliant financing (e.g. through diminishing musharaka supported through catch sharing) for vessels and equipment; > funding to supporting the management and rehabilitation of mangroves; > Providing a raw material (process waste) for a potential feed mill; and > Supporting deep sea fishing vessels landing catch at

Lamu and the development of a local fleet to imrpove safety and quality of catch.

4.3.4.1  Base Assessment

Lamu County has an extensive coastline has been a rich fishing ground supporting inshore and offshore (deep sea) fishing. Sea fishing, and related activities, form one of the most important economic sectors in Lamu Municipality and the wider County. There I an estimated 7,000 fishers and 4,700 fishing boats catching a vast array of both commercial and rare fish species from 40 traditional fishing grounds along the coast. LC accounts for over one quarter of Kenya’s landings of fish and crustacea, with an annual catch of around 4,500 tonnes and potential for landings of over 80,000 tonnes per year. In addition, there is an established pond fish farming sector located around Lake Kenyatta and Lake Witu, plus great scope for developing mariculture (see Box 4-1 below).

Despite this strong resource base, the sector faces a number of serious issues:

> Degradation of mangroves and coral reefs are reducing the ability of stocks to be replenished; > Unregulated fishing and overfishing are further reducing stocks; > Foreign fishing vessels encroaching on territorial waters; > Poor facilities, with the 32 landing sites along the coast having limited, and often inadequate, infrastructure; > Little local processing of catch providing in limited local value added and price volatility; and > Poor handling along the supply chain resulting in significant post-catch losses, estimated at up to 30% of total landings103 .

The potential of the sector to develop, together with the issues faced, have been known for some time, and several plans have been formulated. Under the last CIDP the County government has invested in improvements in fishing equipment and vessels and has built modern fish markets in Faza and Kiunga, developed a hatchery and upgraded a boat yard. The Sector Plan for Blue Economy 2018-2022 proposes the development of a fishing port and market in the County, and the County Government has identified a range of further developments under the 2018-2022 CIDP, including improvements in infrastructure, processing, marketing, and training. In addition, the Lamu Municipality identified the development of sustainable fisheries as one of two projects forming part of their SUED application.

As well as sea fishing, Lamu has potential to develop a mariculture sector along the coast, as well as expand pond fish farming activities inland. Both of these would link into and support sea fishing processing and marketing.

While action is required in many areas to transform the fisheries sector and assist it to reach its potential in terms of value-added and sustainable employment (see section 4.3.4.4), a processing facility has been identified as a key first step in enabling this transformation.

Development of the fish processing and seafood value chain was identified by the LM in their SUED submission and is supported by:

> Lamu CIDP: which identified the need for action in a range of areas to support and develop the fisheries sector; > Sector Plan for Blue Economy 2018-2022: outlining the strategy for developing the sector across Kenya; > Marine Fisheries and Socio-Economic Development Project: a €90 million EU-funded project to develop the sector along the coast, supporting all areas from regulations, to capacity building, infrastructure and training. > Big Four’ agenda: prioritises all areas of agri-processing and value added; and > Sector Plan for Blue Economy 2018-2022.

103 The World Bank, Kenya Marine Fisheries and Socio-Economic Development Project, integrated safeguards data sheet (2017).

Fish catch and potential landings

Fish catch in LC has been reported at around 2,300 tonnes per year104 with the total for Kenya reported at 9,000 per year. However, in 2014 substantial under-recording was recognised as an issue and the State Department of Fisheries, Aquaculture, and the Blue Economy introduced a new catch data collection methodology. Under the new system the catch in Lamu County was estimated at over 4,600 tonnes per year, while that for Kenya was estimated at 22,000 to 24,000 tonnes for the period 2014 to 2016105 .

Discussions with fishers during stakeholder consultations identified under-recording as still being an issue. There are three sets of charges applied to reported landed volumes which provide an incentive for under-recording: cess (KES 1 per kg), BMU landing fees (KES 3 per kg), and SACCO fees (KES 1 per kg).

Lamu County accounts for just over 30% of Kenya’s overall marine fisheries resource base, indicating that annual catch should be around 6,800 to 7,400 tonnes. The much lower reported level being due to a combination of under-recording and lower level of exploitation due, probably to the higher costs of taking catch to market (Mombasa, Nairobi and exports). In terms of what could be achieved in the sector, the Kenya Marine and Fisheries Research Institute (KMFRI) estimates that marine fishing in Kenyan waters has a potential catch of up to 270,000 tonnes per year106 . Assuming that the waters off Lamu County are as productive as those to the south, there is potential for landings in Lamu of over 80,000 tonnes per year. These estimates include catch from deep-sea fisheries, where there is substantial illegal catch by foreign vessels, valued at around $100 million per year107 .

In addition to the sea fisheries potential in the County, there is scope for substantial harvests from mariculture and pond fish farming.

104 Lamu County, statistical abstract (2015). 105 EU, Marine Fisheries Socio-Economic Development Project (2017). 106 Kenya Marine and Fisheries Research Institute, Technical report on fish biomass and the environment of Kenya’s exclusive economic zone (2017). 107 Unregulated and unrecorded fishing loss to Kenyan economy estimated by Marete and Benkenstein. South African Institute of International Affairs, Prospects for the Kenyan Blue Economy (2018).

4.3.4.2  Production Potential and Supply Chain

The linkages and interactions between the activities in the fisheries sector, and with the wider economy, are many and complex. The fisheries sector benefits from being developed as a cluster, with the development of each activity supporting growth in other areas. Figure 4.15 provides a simplified version of how the fisheries sector in Lamu could develop.

The central activity that drives investment and expansion across the cluster, is processing. This provides a stable off-take for catch, increases local value added, and cuts post-catch losses due to spoilage. A commercial-scale processing facility will also have a strong financial incentive to take the lead in two essential areas:

> Standards: to market processed fish and crustacea, the facility will need to ensure hygiene standards and quality control along the supply chain. This could include training for fishers and investments in ice machines, cold storage, landing sites, etc; and > Marine management: to support its seafood brand, the facility will have a strong incentive to ensure that all catch is sustainable, and this extends to supporting the work of the BMUs, mangrove restoration groups and the management of mangroves as the nurseries for many of the species caught. As well something that is necessary for sustainability, actions in this area could help gain internationally recognised certification, such as the Marine

Stewardship Council’s marks, which would strengthen the

Lamu brand and support marketing.