Appraising Aquaculture: The ZALA Park Fish Cultivation
and Makoba Integrated Mariculture Pond System
Z. M. Ngazy
State University of Zanzibar
Planning Section
P. O. Box 146
ZANZIBAR –TANZANIA
E-mail: ngazy@ims.udsm.ac.tz
zngazy@hotmail.com
Teaching Workshop for Urban Environmental accounting 5th – 16th January 2004
ABSTRACT
Aquaculture is regarded as a lucrative endeavor in terms of income and supply of animal
protein to majority of population worldwide. This paper gives results of the preliminary
socio-economic survey conducted in two coastal villages of Zanzibar Island where
coastal aquaculture has been established as a means to supplement the declining fish
catch from the wild. Specifically it evaluates the market for fish in villages and hotels
looking at the local community fish requirements and their perception. Finally it
highlights the Cost Benefit analysis of the ZALA Park mariculture project. Questionnaire
survey was conducted through formal interviews to a random sample of 74 households in
Makoba and villages around ZALA Park in Mungoni, also to 15 hotels along the east
coast of the Zanzibar. Also, informal individual interviews with stake holders including
women who previously used the pond site in Mungoni for other use as well as
observations at various economic areas such as fish pond construction, fish landings
stations and existing economic activities in the village.
Preliminary findings show higher proportion for males than female household members
and suggest more dependence on fishing activities in the sea. Majority of interviewees
were optimistic about farming, market for cultivated species existed both in hotels and
the households in the sense that villagers’ requirement for cultivated fish was estimated
on average to be 21 kgs per household per month and hoteliers demand whole year round
seemed to be quite considerable during high tourist seasons. The Zala Park and the
Makoba sites were previously used for burying coconut husks for rope making and salt
production respectively and formed part of income generating activities. Financial
analysis for ZALA Park fish culturing indicate the project is viable at 12% discount rate.
2
1. Introduction
Coastal aquaculture production is increasingly becoming popular in Zanzibar as a means
to make the ends meet in daily lives of the coastal communities who mostly depend on
marine ecosystem for subsistence and income. Likewise Ronnback et al (2002) puts
forward that most coastal aquaculture development has taken place in Asia, Europe and
South America whereas relatively modest production has been achieved in Africa. Such
aquaculture could also supplement the diets of coastal villagers with fish protein in
addition to providing new source of income. But one of the main challenge for the
development of coastal aquaculture in Zanzibar is avoiding the mistakes that have been
made in other part of the world.
Efforts are in place to identify the social, economic and environmental impact of
aquaculture in countries that have experienced environmental destruction but relatively
very little has been done on Zanzibar due to reason that aquaculture is still in
experimental stage. Knowledge and awareness on impacts is important because it shed
light on the trade offs between economic gains and environmental impacts as well as
economic gains and social impact of such undertaking which is a key information for the
policy making bodies in Zanzibar and a guidance to potential investors in coastal
aquaculture activity.
This paper presents results from a preliminary survey in two fishing villages in Zanzibar.
Focus is on appraisal of coastal aquaculture on fish at the Zanzibar Land Animal (ZALA)
Park and socio-economic findings for the ZALA Park and Integrated Mariculture Pond
System (IMPS) at Mafufuni in Makoba village. It consists of five main parts, the first
and second part introduces and gives an overview on fish culturing initiatives in Zanzibar
with the historical background of the two project sites also the expected socio-economic
benefits with respect to establishment of aquaculture for fish. It also touches on the
theoretical background of the costs benefit analysis of the ZALA Park aquaculture project
paving a way to explore the opportunity costs of the sites. Third part provides sections on
methodology used in the study that leaded to results on social and economic analysis in
3
the fourth part. The last part ends with conclusion and recommendations for further
study.
2. Overview
Fishing in Zanzibar however artisanal is an industry that makes a significant contribution
to the national economy both in terms of income, employment generation. Also it is an
important supplement for animal protein to majority of people in the islands of Zanzibar
and therefore contributes to people’s health and therefore improvement in human capital.
On the other hand, fisheries sector has been observed to give a significant support to the
growing tourism industry in Zanzibar through its supply to hotels and recreational park
areas. Increasing population and the use of destructive fishing gears among other factors
have made the fish catch to decline overtime hence increasing demand that is satisfied by
the cost of unaffordable fish prices. Moreover, fishermen have been observed to spend
relatively more time in fishing and therefore reduced time for other economic activities
and leisure that could improve their household’s welfare. Reflecting the success of
coastal aquaculture of seaweed in Zanzibar there is local interest in starting fish, shellfish
and crustacean mariculture. Several proposals have been put forward for undertakings in
Zanzibar however at a small scale. A few rudimentary ponds already exist at Nungwi and
Chwaka on Zanzibar island (Mmochi and Jiddawi, 1996). The intention is to cover the
gap of excess demand for fish in different coastal villages of Zanzibar by increasing
supply especially during off seasons, thus satisfying demand in households, hotels and
elsewhere.
Such initiative involves investment of natural, financial, and time resource committed to
produce financial gains that of course are at the cost of the societal welfare. Ronnback et
al (2002) underscore that aquaculture activities often utilize common property resource
such as land, water and mangrove areas, this contribute greatly to social equity.
Consideration therefore, has to be given to the cost or negative externality that others are
going to suffer by using mangrove land for different projects. Otherwise, a Pareto
improvement in social welfare should be sought where some people are made better off
by the project without making others worse off. Under such circumstance distributional
4
issues can be addressed only if gainers from the project could compensate losers through
direct payments or tax distribution etc (Georgiou et al 1997).
In line with the above, survey have been conducted in the area to assess local
communities perceptions on Mangrove land use for coastal aquaculture for fish, current
fish marketing system and demand for targeted cultivated species in Zanzibar as well as
the viability of culturing fish with regard to costs.
2.1 Historical Background
The ZALA Park fishpond is a local community initiative located in Mungoni village 25
km away south west of Zanzibar town. The ZALA Park is zoological; it has some
specimens of local animals that are native to Zanzibar islands and work to promote an
ecological preservation, environmental education to students who visits the park and
research. The fishpond is owned by a group of five people who manage and educate on
conservation of animals. A wall with a gate is constructed on a mangrove pond that was
excavated to allow control of tidal fluctuations due to its access to the sea. Approximately
the 10002 m pond should be capable of producing 1000 kg of mullets (Mkizi) per year
that would be harvested during scarcity periods when there is less catch from the sea or
during high tourist season when demand for fish rise. Tentative plan for the group is to
construct restaurant in the Park area that could carter for tourists, students and local
people visiting the area. It is therefore expected that the fish pond will form a forward
linkage with the restaurant by supplying fish and the restaurants will provide catering
services to students who prefer to spend some days in the park for research purposes.
The fish pond area was formerly used by a group of twenty women from the village who
individually used the area to process coconut husks for rope making. The activity
involves clearing the mangrove roots to excavate the land (vyao1) for burying the husks
that are let to rot under ground for nine months before they are exhumed for further
processing. The area has been used for such activity since time immemorial and the
rights to use the area for that activity has been passed over from one generation to
another. Hence the activity is indigenous supplementing women’s meager income and
1
A ditch used to bury coconut husks for processing
5
form one of the few income generating activities for women in the village. The mangrove
area is communally owned however the vyao are privately owned by individual women
this is because preparation involves individual efforts and are continuously replaced by
new husks after every nine month when the husks are ready.
Conversely, the Makoba ponds are owned by the local government and were formerly
used for salt production that later became unprofitable and therefore abandoned. After a
very long idle period the pans were converted to integrated fish farming ponds a
technique that was simulated from Israel and adapted to local conditions in Zanzibar.
Basically decision to establish fish cultivation came about as a measure to utilize the area
productively and to demonstrate prototype IMPS within the environmental, socioeconomic and technological conditions that prevails in Zanzibar and to enhance research
capabilities for development of coastal aquaculture. The pans at the Makoba Bay north
west side of Zanzibar island are located where mangrove estuary is fed by two rivers
namely Zingwezingwe and Mwanakombo flowing into the creeks. Existing infrastructure
spread over 5-6 hectares and includes water channels for the inflow of water from the sea,
water gates and earthened dikes. The experimental system consists of six ponds of 170m3
each for the culture of fish, shellfish and seaweed.
The ponds on both sites are models that are supervised and monitored by researchers
from the Institute of Marine Sciences (IMS) in Zanzibar who provide professional advice
in different issues relating to marine ecosystem, fingerlings and feedings before the
technique is distributed to potential fish cultivators in Zanzibar. The outcome of this
project is a result of collaboration between IMS and Scientists from from the National
Centre for Mariculture (NCM) in Eilat, Israel (Mmochi et al 1999). The idea to establish
aquaculture for fish came about as an attempt to satisfy demand for fish in Zanzibar,
hence a food security and poverty reduction measure in villages as well as to reduce
fishing pressure in the coastal waters of Zanzibar.
6
2.2 Theoretical background
Sinden and Thampapillai (1995) give a broad definition on the benefit cost analysis as a
framework for organizing information, listing the advantages and disadvantages of each
alternative, determining the relevant economic values, and ranking alternatives on the
criterion of economic worth as a way to make choices. In other words when several
options exist for the use of the same basic resource the net benefits of the various options
are compared to determine the most profitable way to use the resource.
A benefit is basically an increase in utility or satisfaction an individual attain for
consumption of goods and services. Economic analysis in this respect, use the maximum
amount that consumers is willing to pay as a measure of benefit, but in reality such an
analysis uses market prices of inputs and outputs. Conversely, cost is a disutility or rather
dissatisfaction a consumer suffers, and are assessed through the compensation people
require for bearing them.
Mangrove benefits would be acknowledged only if alternative options for mangrove land
use are taken into consideration; decisions to utilize mangrove areas for other uses would
always involve gainers and losers. This can only economically be done if valuation of all
the tangible and intangible benefits derived from the mangroves in the respective area is
conducted to avoid a general tendency where society seeks to allocate its resources in a
manner that makes the greatest possible contribution towards satisfying personal needs
and wants for goods and services without regards to others or at least to future
generations. Optimality and sustainability in this case becomes a challenge to developers
in evaluating mangrove land use alternatives, bearing in mind that estimation of
economic value of the marketed and non-marketed goods and services of the ecosystem
in question is however significant but difficult to undertake. An implicit assumption is
that society will be economically efficient in its use of resource when all costs and
benefits2 are included in the analysis. The objective function is maximization of social net
benefits assuming that the demand for an ecosystem is a derived demand for the goods
and services that particular system support.
2
This include direct and indirect, tangible and non tangible
7
Price
Supply = Marginal Cost = Willingness to sell
a
b
c
Demand=Marginal Benefit = Willingness to Pay
O
Quantity
Figure 1: Environmental Valuation in the Basic Exchange Model
The rational for valuing mangroves intangible in this regard comes from the basic model
of exchange where by market price is determined by intersection of demand and supply
of environmental good or service (Figure 1 above). This model is the standard value
model used for the estimation of environmental benefit/cost at a time. According to
Sinden and Worrel, (1979) area (a + b) give an estimate for the value of environmental
benefits/costs. Whereas area (a+b+c) give estimation of Willingness to Pay (WTP) thus
grouped under the survey and bidding game or Contingent Valuation (CVM) techniques.
The model is static but at least it gives a basic idea on benefit and cost concepts and has
been used in estimation of different values in different studies (Grilliches, 1958; Barret
and Waddel 1973; Hammack and Brown 1974; Hannemann, 1994) thus forms a
foundation to different valuation techniques that are to be used in estimation of intangible
environmental benefits for incorporation to the cost-benefit analysis.
3. Methodology
Preliminary socio–economic survey involved formal interviews to a random sample of 74
households in two coastal villages and 15 hotels along the east coast of the Zanzibar
8
Island using two sets of questionnaires. Similarly, informal individual discussions were
held with women who previously used the ZALA Park fishpond site in processing
coconut husks. Key informant interviews were conducted with fishpond owners, Shehas 3
and village cooperatives to generate information on various issues. Evaluation of costs
and benefits used market prices and a discount rate of 12% being the rate used by the
World Bank for project appraisals in developing countries. This study aimed at
conducting cost benefit analysis of the aquaculture project in ZALA Park area, however,
due to time and financial constraint economic valuation could not be conducted in this
phase, analysis therefore do not consider the mangroves benefits or generally speaking
ecological services/benefit that mangroves generates offsite and the value that the local
community attach on option of having the mangrove site for its original land use.
3.1 Societal Benefits and Cost from Coastal Aquaculture Project
Looking from a bird’s eye view, the societal benefits of the project under study are
broadly divided into three main categories. First and foremost is demonstration effect of
fish culturing technique that is expected to spill over to local people in other villages who
would in future want to invest in aquaculture activity. Secondly, strengthening research
capacity of the local researchers in production and innovation of fish culturing techniques
that are environmentally friendly, sustainable and economically viable, considering the
local situations. Thirdly, it is one of the food security and poverty reduction processes for
local community who fully directed their livelihoods in fishing and extraction of natural
resources.
Ecosystem wise, it is widely known that the benefits of mangroves have not ended onsite
but are extended offsite as well. It is well documented that since time immemorial,
mangrove ecosystems have contributed significantly to the well being of the coastal
communities through their provision of various goods and services such as wood, forage
for livestock, honey, medicine and higher valued fisheries. Mangrove areas are breeding
sites for fish and other marine creatures that are lucrative to majority of people in the
coastal areas. Ecosystem services include coastal protection, nutrient cycling and habitat
3
Heads of villages
9
for wildlife4.
Moreover, mangrove areas are often used for some other traditional
activities such as gleaning, burying coconut husks for rope production etc. Finally came
the emerging ideas on coastal aquaculture on fish with the ideas of adapting it to a small
scale and mangrove ecosystem friendly. Some of the mentioned benefits have existing
market prices and others due to market and policy failures society disregard the monetary
value for such ecosystem services. Despite the failures placing monetary values on
different mangrove goods and services for economic valuation purposes is still crucial
therefore worth be acknowledged in this paper.
3.2 Need for Valuation
For this study, mangroves valuation at the ZALA Park fish pond has to consider
ecological services that mangroves generates both on site and off site; in this case,
techniques such as Contingent Valuation (CVM), Preventive expenditure (PE) and
Replacement Cost (R) would have been used for economic valuation. But considering the
intensity of fish farming at the ZALA Park whereby the activity is conducted on a small
scale and very few mangroves have been clear felled for pond construction under a
regular scientific monitoring; it is assumed that there is insignificant ecological impact.
Dixon and Lal (1993) commented that a wide variety of single purposes activities may
occupy the same area of mangrove at the same time or at different periods without
causing damage to the system in question.
Despite the assumption of insignificant impact, yet economic and financial analysis is
crucial in order to have a wider perspective of the positive and negative impacts on the
project. For that matter, next phase of this study is planned to consider value attached
with mangroves that were clear felled and that are still destined for destruction while the
fish farming is in progress. The idea is to value expected mangrove loss with respect to
establishment of such kind of aquaculture and to weigh the opportunity costs as a
4
There is an array of literatures that provides details on direct and indirect benefits of mangroves
ecosystem including Christensen; B. (1982); Evan, D. Mercer; Lawrence and S. Hamilton(1984); Ngoile
M. A. K and P. J. Shunula (1992), Nasser S. M. (1994); Shunula and A. Whitick (1996); Maler et al,
(1996); Spaninks F. and Pieter van Beukering, (1997); Ronnback P. (1997); Semesi, A. K. 1998,
10
justification for decisions to continue utilizing mangrove area for fish farming and not for
other undertaking or just leaving it intact.
4. Results and Discussion
4.1 Household Characteristics
The Communities of Mungoni and Makoba village consist of 1320 and 6940 people with
286 and 1320 households size of 4.6 and 5.3 respectively making the average of
approximately 5. Generally population in both villages give a higher proportion of males
than females (Census 2002) suggesting further exploitation of coastal waters for fishing
activities a favorite activity to majority of men in coastal villages of Zanzibar. This is
also supported by the age group structure which range between 11 years and 80 years,
majority being the age of 31 to 40 years (figure 2 below) and therefore very energetic to
withstand the hardship of fishing activity in the sea.
Respondents' Age Distribution
30
No. of Respondents
25
20
15
10
5
0
11 - 20
21 - 30
31 - 40
41 - 50
51 - 60
61 - 70
71 - 80
Age Group
Figure 2: Respondents Age Distribution
Levels of education for both villages showed that 35.6 % completed form I to form III
compulsory basic education in Zanzibar. Only 2.7% completed form IV, a secondary
level of education that allows one in Tanzania/Zanzibar to sit for Ordinary Level
Certificates that could at least give someone a chance to go for higher studies. A
significant number 16.4% of respondents did not go to school and are regarded as not
11
having formal education (see figure 2); however, most of those have completed Madras,
religious institutions that are attended by Muslims and are popular in Zanzibar.
Respondents' Levels of Education
30
No. of Respondents
25
20
15
10
5
0
N.F.E
Std 1 - 4
Std 5 - 8
Form I - III
Form IV
Level of Education
Figure 3: Respondents’ Level of education
4.2 Local Community Livelihood Structure
Local community livelihoods are the day today activities that villagers are engaged in
order to earn their daily bread. Generally villagers in Makoba and Mungoni had low
income to enable them invest in more profitable and sustainable economic activities; they
mostly depended on unsustainable exploitation of natural resources being marine,
terrestrial or both. Analysis suggests that respondents in both villages were
simultaneously engaged in more than one economic activity. Among those, fishing was
found to be the most dominant activity for the villages followed by farming, other
activities though insignificant are government employment, tailoring and public
transport. Formal interviews suggested that activities relating to mangrove are
insignificant in both villages. Reason might be illegality of mangrove cutting; however,
villagers are allowed to utilize it for subsistence purposes such as own house construction
in respective villages or villagers have to seek a permit from Department of Forestry to
cut dry/dead mangrove for home use. Observation in villages revealed that mangroves in
the area was mainly used for charcoal making due to its high calorific value that made it
fetches higher price than charcoal made out of terrestrial trees. This observation was
12
common in Mungoni village where a bag of mangrove charcoal sold at a price of 3,500 5
Tshs each, whereas a bag of similar size made of terrestrial trees was sold at 2,500 Tshs.
Livelihood activities
40
% of responses
35
30
25
20
15
10
5
Fa
rm
in
Fi g
sh
in
g
An
O
.H
th
e
us
ba r
nd
Se
ry
a
w
e
H
e
an d
dc
ra
ft
Tr
a
G de
le
a
M ni n
g
an
Li g ro
m
e ve
m
ak
in
g
St
Yo u de
u n nt
g
ch
ild
0
Activity
Figure 4: Livelihood activities
Anderson and Ngazy (1998) highlighted that the Coastal zone offers a large number of
production alternatives, derived from large number of ecosystems. Therefore as a risk
aversion strategy, villagers often diversify their daily activities wisely depending on
seasons. They combine their activities such that they have their flow of cash and
subsistence fairly constant through out the year to carter for daily expenditures.
Similarly, economic activities in study villages often supplements each other, however
one of those always becomes most dominant depending on season 6. The dominant
activity is regarded as primary and hence most reliable for income generation. In
principle activities from this study were grouped as primary, secondary, tertiary and
quartenary, but few villagers found to be engaged in more than three activities. Looking
the activities for both villages in figure 4 above, farming take a lead followed by fishing
and the least mentioned is mangrove related activities including lime making. Basically,
depending on season fishing and farming were alternatively the backbone of the
households’ economy in both villages thus usually regarded by villagers as their primary
activities. Farming is usually conducted on a plot of land within the village suburbs and
fishing is extended very far from the village and often fishermen uses more than one
fishing ground depending on weather, vessel and type of gears.
5
1,038 Tshs equivalent to 1 USD
13
Fishing in Makoba and Mungoni is artisanal, Fishing gears were found to be hooks and
line 75%, dema traps 5%, line and hooks plus nets 5.2%, net (segeju), nets (other kinds)
10%. (Fig. 5 below)
Fishing Gears in Mungoni and
Makoba
10%
hooks and line
4.80%
5.20%
dema trap
hooks and net
5%
net segeju
net other kind
75%
Figure 5: Fishing Gears in Makoba
Common vessels and means used for fishing were dug out canoe 50%, canoe 24.3% and
by feet 2.7% (Fig 6 below). Despite the overall results for vessels and gears, proportion
for type of vessels and gears differ in two villages, but considering sample representation
between the villages at the time of this analysis, it was decided to combine data for both..
Vessels in Mungoni and Makoba
2.70%
24.30%
dug out canoe
canoe
feet
50%
Figure 6: Types of Vessels in Mungoni and Makoba
6
See also Rosenznzweig, M. R. (1988); Andersson and Ngazy (1998)
14
Analysis of the vessels suggested that the type of vessel and proximity or accessibility to
fishing grounds is among the factors determining the use of fishing ground. This is
supplemented by Tobisson et al (1998) findings that the fishermen’s activities are to a
large extent influenced by the direction and intensity of winds. In this regard, Fishermen
from Makoba to the north west of Zanzibar utilized fishing grounds on the Tanzania
mainland mostly, whereas fishermen from Mungoni to the South west of Zanzibar Island
utilized fishing grounds that are within Zanzibar waters mostly (Ngazy and Jiddawi,
2003).
Individual informal discussion with women who had their coconut husk buried at the
fishpond site revealed that majority of them were satisfied with the compensation they
received from fishpond owners. However due to different factors which leads one to
his/her original utility, very few women were dissatisfied and claimed that they deserved
more compensation in accordance to their utility according to specific value they attach
to the place and the intensity of their work on that place. Nevertheless, all the women
who have decided to carry on with the activity managed to find an alternative site.
4.3 Demand for Fish in Makoba and Mungoni
Interviews with hoteliers along the Zanzibar East Coast suggested that 71.4% of the
hotels received foreigners only where as 28.5% received both foreigners and locals both
residents and non-residents but had their meals in those hotels.
Customers Preferences in East
Coast Hotels
Kingfish
Red snaper
Changu
Rabbitfish
Sail fish
Chewa
calamari
Prawns
Octopus
Figure 7: Customers Preference for sea foods in East Coast Hotels
15
Responses for the question on preference for seafood/fish specie show that most preferred
fish were Red snapper and Kingfish followed by Tuna (Jodari), Marlin and Lobster and
least Preferred specie were Dorado, Shark, groupper (Chewa) and Prawns (see figure 7
above).
Demand for fish during tourist low seasons and high seasons in the East coast hotels’ was
213,720 kg and 521,400 kg respectively assuming three months period per season.
Compared the figures to National fish catch the quantity is substantial bearing in mind
that the sample didn’t include all the big hotels in Zanzibar. Turning out attention to a
general increasing tourist trend in Zanzibar (see Ngazy et al, 2000), fish consumption in
hotel portray interesting suggestion between fishing and tourism that need a follow up
(pers.com 2003).
Regarding fish prices, the increasing number of hotels along the east coast seemed to
have a negative effect on hoteliers. Relatively it increased fish prices in their locality
contrary to hypothesis that hoteliers would enjoy the advantage of low prices due to their
location in villages rather than in town. Responses from the question on fish prices show
that 42.8% of the interviewed hotelier mentioned that prices are the same in the village
and town. In addition some of them claimed that most of the time they couldn’t get their
fish supply from the villages therefore had to buy fish from town market thus involving
transport costs and more time consuming. 28.5% responded that prices are lower in their
locality than in town, 14.2% responded that prices are higher in their locality than in town
market and 7% could not compare prices in town and their localities.
4.4 Local Community perceptions on Coastal Aquaculture
Survey revealed that so far fish cultivation initiatives are not very popular to most people
in the villages despite the increasing proposals for the same. This is revealed by 78.6%
who have not heard about fish farming in Zanzibar and a smaller proportion 21.4% who
have heard about it, but have never been supplied with fish from those farms. The idea of
establishing the activity in Zanzibar was seen by 79% of interviewees as good, whereas
14.3% decide not to respond to the question and 7.2% were unsure if it is good or bad.
16
For those who are optimistic with the idea responded that they would like to buy the
cultivated specie but this was subject to price, specie and season. Those who would not
want to buy cultivated fish were 21% reason was their preference for Red snapper, Tuna
and white flash fish (figure 6 above) that might be differently from the cultivated specie.
Suggested price by respondents for cultivated specie was 970 Tshs per kg. This price is
however low considering unpredictable changes for feeds, substitutes and maintenance
cost. Johansson (1996) point out that fish population does not expand indefinitely, since
natural conditions (food) set a limit to expansion, harvesting more than growth, would
ultimately cause the depletion of the resource. This implies that profit-maximizing firm
would deplete the resource immediately if its price is expected to increase at a rate that
falls short of the market interest rate.
Majority of respondents revealed that household demand and price for fish was
increasing in both villages while fish supply was decreasing this is consistent with
demand and supply theory, therefore they have changed their preferences substituting
vegetables for fish. Main types of vegetables used are beans, spinach and cassava leaves.
Also, in the past households used to consume fish at least in each one of the three meals
of the day for all the days in a month, but currently on average households consumed 21
kg per household per month, for majority of the household this quantity claimed to be
sufficient for not more than three weeks7. Ronnback et all (2000) show that the average
fish consumption per person in the world was 16.1 kg yr-1 in 2000. Different region
however show very dissimilar trends. Hence considering average villages’ household size
of 5 people consumption per person is approximately be 4kg per month, this might be
unrealistic and unaffordable to local village considering fish price and villagers’ income.
4.5 Economic Returns from ZALA Park Pond Area
Before pond construction started, women coconut husk processors were requested to
transfer their coconut husks to another area along the coast where they could continue
7
We have to understand that usually majority of villagers consume the low priced fish and sell the high
priced fish to earn more income.
17
with the activity. They were assisted in exhuming the husks and reburying them in a new
area with a displacement compensation totaling 635,000/- Tshs that was paid to women
individually (in ZALA Park group’s records) though at differing rate.
Apart from the compensation figure, economic analysis for the project was constrained
by unavailability of data for values on mangroves ecological services and timber and non
timber resource values for clear felled mangroves that stood at the site before pond
construction, also mangroves that might be at risk of destruction while fish culturing is in
progress, especially when we consider that the project is an experimental undertaking,
however under professional supervision and monitoring. Concern is still given to what
society gives up and what society receives in return. From development point of view,
this could be given by the use of shadow prices8 or by quantification of opportunity costs.
Alcala (1988) in Ronnback et al, 2002 estimated that each ha mangrove can generate
1,100 –11,800 kg fisheries catch mean (3600 kg) (reviewed in Ronnback, 1999), which
illustrates the potential life support value of mangroves. This productivity is for example,
much higher than the10 –370 kg ha-1 yr-1 proposed for coral reefs by Alcala, 1988. In
developing countries, the annual market value of fisheries supported by mangrove range
from USD 900 to USD 12,400 ha-1 mangrove (USD 3400 ha-1 as mean) (Ronnback,
1999). This value is based on one mangrove good only i.e fisheries production.
Cost benefit analysis for this paper therefore, focused more on financial perspective of
the ZALA Park project. Additional effort is still to be made in economic analysis by
estimating the economic value of ecological services and other resources generated by
mangrove. This will follow later when the negatives and positive changes become
known. So far financial analysis gives a greater hope for project feasibility as presented
by the Net Present Values (NPV), Benefit Cost Ratio (BCR) and Internal Rate of return
(IRR) in the outline of Cost-benefit analysis below.
8
Adjustment of market prices to correct for distortion caused by government intervention or regulations
18
Costs and Expected Revenues for the ZALA Park Aquaculture
1) Initial Project Costs in 1st year:
1,245,6009
Pond construction
Compensation to rope markers
635,000
Labor cost 10
210,000
Sub total
2,090600
2) Annual costs
Maintenance cost11
55,000
Fishing net
43,100
Reproduction and Fingerling
17,200
Sub total
115,300
3. Annual revenue from fish sales
800,000
Discount rate 12%
Table 1: ZALA Park NPV Cash Flow
Year
Benefit
Capital costs
Annual costs
Net Cash flow
1
0
-2,090,600
-115,300
-2,205,900
2
800,000
0
- 115,300
684,700
3
800,000
0
-115,300
684,700
4
800,000
0
-115,300
684,700
5
800,000
0
-115,300
684,700
6
800,000
0
-115,300
684,700
7
800,000
0
-115,300
684,700
8
800,000
0
-115,300
684,700
9
800,000
0
-115,300
684,700
10
800,000
0
-115,300
684,700
PV
3805892.7
-1,866,607.1
-651,470.7
1,287,814.9
9
this is equivalent to 1200 USD
Opportunity cost of labor is calculated as the social cost for labor considering 21 days used by project
owners in exhuming coconut husks from the pond area and supervision.
11
This include feed, fertilizer and pond maintenance
10
19
NPV =
Tshs. 1,287,814.9
Benefit Cost Ratio = PV Benefit/PV costs = 1.5
IRR =28%
NPV gives the net present value of an investment by using a discount rate and a series of
future payments (negative values) and income (positive values). This is a first decision
criterion, it require that project NPV>0 in order to be feasible. Thus it reflects that the
present value of incremental benefit exceeds the present value of all capital and recurrent
costs. Objective is to maximize NPV, since appraisal in this case involve only one
site/project the project is seen as feasible for Local communities to undertake.
BCR explains how much the owner gets from every 1sh expended in the project.
Therefore the project seems to be feasible if for every 1 shilling the owner get more than
one shilling. Referring to this case the project is feasible since the BCR is 1.5, however
we can’t say that it is the best since we don’t have alternative project to compare with in
order to select the optimal one.
IRR is the discount rate that will bring NPV of the project equal to zero. On the other
hand it is a return on investment such that the Present value of measured benefit equals
the present value of measured costs. The objective in this criterion is for the project to
earn an IRR greater than opportunity cost of capital which in this case the IRR is 28%
and therefore greater than 12%. According to this criterion this project is accepted,
otherwise if less than 12% it would be rejected.
5. Conclusion and Recommendations
Preliminary fish culturing initiatives are perceived by local communities as a positive
undertaking and a good idea to satisfy increasing demand for fish in Zanzibar especially
following tourism promotion in the islands. The ZALA park fish aquaculture project
appears to be feasible, however further survey and assessments have still to be done on
the use values and ecological values of mangroves in the area for the sake of economic
analysis and financial analysis of the Makoba fish farm project and estimation of
economic value for integrated fish pond system at Makoba site for incorporation to cost
benefit analysis.
20
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