Rents Drain in Fisheries: The Case of the Lake Victoria Nile Perch Fishery

Abstract

Many fisheries are potentially very valuable. According to a recent report by the World Bank and the FAO (2008), global fisheries rents could be as high as US$ 40-60 billion annually on a sustainable basis. However, according to the report, due to the “common property problem”, most fisheries of the world are severely overexploited and generate no economic rents. The Lake Victoria Nile perch fishery could be among the most valuable fisheries in the world. Unfortunately, also this fishery has fallen prey to the common property problem with excessive fishing effort, dwindling stocks and declining profitability. As a result, there is a large and growing rents loss in this fishery (compared to the optimal) reducing economic welfare and economic growth opportunities in the countries sharing this fishery. As in other fisheries, the biological and economic recovery of this fishery can only come though improved fisheries management.

Key words: Fisheries rents, fisheries rents loss, Nile perch fishery, Lake Victoria, fisheries management, common property problem

*Keynote paper presented to the Lake Victoria Stakeholder’s Conference, Kampala, Uganda, 27-30 October 2008