Will Africa be able to exploit the potential of a globally booming ocean economy?

By Danilo Desiderio

The ocean economy has experienced significant global growth, expanding approximately 2.5 times over the past three decades, according to a recent UNCTAD report. Notably, South-South trade between developing countries has surged, despite high tariffs that hinder trade developing countries charge an average tariff of 14 percent on fish product exchanges, compared to just 3.2 percent in high-income countries.

From 2021 to 2023, fish exports among developing nations increased by 43 percent, totaling US$19 billion, while processed fish exports saw an impressive rise of 89 percent, reaching US$23 billion. In 2023, global trade in ocean goods and services hit record levels of US$899 billion and US$1.3 trillion, respectively.

This underscores the growing economic importance of marine activities, particularly for coastal and island nations in developing countries, where fisheries alone sustain the livelihoods of about 600 million people.

Untapped Potential of Ocean Resources

Encouragingly, the vast potential of ocean resources remains largely untapped. Approximately two-thirds of marine species are still unidentified, presenting exciting opportunities for research, innovation, and production.

Among the many sectors within the ocean economy, the marine biotechnology market stands out. This industry leverages biological ocean resources to create products for various uses, including pharmaceuticals, cosmetics, dietary supplements, functional foods, and biofuels.

With the market valued at US$4.2 billion in 2023, it is expected to grow to US$6.4 billion by 2025, driven by increasing demand for low-carbon marine foods, new antibiotics, and organic materials.

The rapid growth of the ocean economy presents a significant opportunity to drive Africa’s economic transformation, but its sustainable and equitable development requires ongoing commitment and action.

Challenges and Opportunities for African Nations

For African coastal and island nations, the ocean economy presents a powerful avenue for economic diversification. Africa is surrounded by two seas and two oceans, making it well-positioned to capitalize on marine resources.

Even landlocked countries have started to develop “blue economy” strategies, aiming to unlock the potential of their freshwater ecosystems. Ethiopia, for example, introduced its own blue economy strategy in December 2022, focusing on the sustainable use of its lakes, rivers, and groundwater to stimulate economic growth.

However, despite its potential, the ocean economy in Africa faces numerous challenges. Climate change is a major threat, with rising ocean temperatures disrupting marine ecosystems, depleting fish populations, and undermining food security.

The effects extend to maritime trade, as rising sea levels and droughts endanger ports and shipping routes, while extreme weather events disrupt shipments and increase insurance costs. Additionally, pollution, illegal and unregulated fishing, and inadequate institutional capacity in many African nations hinder the development of the ocean economy.

Securing the necessary funding for ocean economy initiatives remains a significant hurdle as well.

Strategy

Recognizing the importance of this sector, the African Union adopted a Blue Economy Strategy in 2019, providing a continental framework to guide the sustainable development and utilization of aquatic resources. This strategy encourages value addition and technology transfer, with several regional bodies also adopting similar plans.

The Inter-Governmental Authority on Development (IGAD) launched its own Regional Blue Economy Strategy in 2020, along with an associated implementation plan. Increasingly, African nations are also recognizing the need for marine spatial planning and integrated coastal zone management to ensure sustainable and cohesive management of human activities in marine areas.

South Africa has taken a leading role, passing a marine spatial planning law in 2018, which has since influenced regulations in other African countries.

Despite these positive strides, more work remains to fully realize the potential of Africa’s ocean economy. International organizations and multilateral banks, such as the World Bank’s Blue Economy for Resilient Africa program, have made important contributions, but continued efforts are crucial.

The rapid growth of the ocean economy presents a significant opportunity to drive Africa’s economic transformation, but its sustainable and equitable development requires ongoing commitment and action.

Danilo Desiderio serves as the CEO of Desiderio Consultants Ltd in Nairobi, Kenya, specializing in African customs, trade, and transport policies. He is a customs and trade expert at the World Bank and a senior associate to the Horn Economic and Social Policy Institute (HESPI).