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

According to a recent UNCTAD note, the ocean economy has grown globally approximately 2.5 times in the last 3 decades, with a strong acceleration of South-South trade recorded in the latest years between developing countries, despite the high tariffs applied (developing countries apply average tariffs of 14% on their reciprocal exchange of fish products, compared the 3.2% in high-income countries). From 2021 to 2023, fish (primary) exports along the South-South axis rose of 43% (for a total of 19 billion USD), while processed fish exports jumped to 89%, reaching 23 billion USD. Trade in ocean goods and services reached in 2023 record highs of 899 billion USD and 1.3 trillion USD, respectively. This highlights the growing importance of marine activities, especially for coastal and island nations in developing countries, where fisheries alone sustain about 600 million people.

The good news is that ocean resources remain today largely unexplored, with around two-thirds of marine species that are still unidentified. This offers a huge potential in research, innovation and production. Among the many sectors of the ocean economy, UNCTAD notes, the marine biotechnology market (the use of biological ocean resources to create products for various industrial uses, such as pharmaceuticals, cosmetics, dietary supplements, functional foods and biofuels, among others), is particularly promising. Estimated at 4.2 billion USD in 2023, this market is expected to reach 6.4 billion USD by 2025, driven by the increasing demand in low-carbon marine foods, new antibiotics and basic materials organic.

The ocean economy is a sector that is particularly interesting for the economic diversification of the coastal and island nations in Africa, a continent surrounded by two seas and two oceans. More recently, a trend has emerged also for landlocked countries to adopt comprehensive “blue economy” strategies as an attempt to exploit the potential of their freshwater ecosystems. This is the case, for example, of Ethiopia, which developed its blue economy strategy in the second half of December 2022 to guide the sustainable use of its marine and aquatic ecosystems (including lakes, groundwater and rivers) for promoting economic growth.

Despite the potential, numerous challenges hamper the expansion of the ocean economy in Africa. First, this sector is particularly vulnerable to climate change. Warmer ocean waters disrupt marine ecosystems, harm fish populations, shrink harvests and threaten food security. The risks extend to maritime trade. Rising sea waters and drought threaten ports and shipping routes, while extreme weather conditions may delay shipments and inflate insurance costs. Second, pollution, Illegal, unreported, and unregulated (IUU) fishing, and a lack of the institutional capacity by many African nations to effectively manage their marine resources act as additional obstacles to the development of the ocean economy. Securing adequate funding for developing ocean economy initiatives is also another major challenge.

Aware of the importance of this compartment of the economy, the African Union adopted in 2019 a Blue Economy Strategy which provides a continental framework for guiding the sustainable development and utilization of aquatic resources in Africa, encouraging value addition and technology transfer. Several Regional Economic Communities (RECs) have adopted similar strategies at sub-regional level. This is the case for instance of the Inter-Governmental Authority on Development (IGAD), which developed in 2020 a Regional Blue Economy Strategy with an associated Implementation Action Plan. There is also a growing awareness among African States of the importance of marine spatial planning and integrated coastal zone management to provide a framework for the sustainable and integrated management of human activities in marine areas. In this regard, South Africa has played a pioneering role, with the adoption of the law on marine spatial planning (law no. 16 of 2018), which inspired the regulations adopted by many African states on the same subject.

However, despite this significant progress, further efforts are still needed to ensure the further development of this booming sector. Initiatives implemented by international organizations and multilateral banks such as the World Bank's Blue Economy for Resilient Africa program represent an important step in this direction, but they are not sufficient. Continued efforts are still needed to ensure the sustainable and equitable development of this branch of the continental economy which is growing at a faster rate than others, and which is key for promoting the economic transformation of Africa.