A fish cartel for Africa

For centuries, resource-rich but poorer countries supplied raw materials to wealthier nations, a dynamic that persists in modern forms of natural resource extraction and trade. In fisheries, newly available satellite data show that foreign vessels—often from China, Taiwan, South Korea, and the EU—account for more than half of fishing activity in African waters and typically pay very low access fees relative to dockside values. This context raises three questions: (1) Why are fishing agreements apparently disadvantageous to African countries? (2) If African countries sold access as a cartel, how would they benefit economically? (3) What would be the conservation implications of such a cartel? Many low- and middle-income countries sell the right to fish in their waters to high-income countries via access agreements that specify quantities, species, methods, and fees. For example, in 2019 Senegal allowed 28 EU purse seine vessels to catch 6,475 tons of tuna for $90 per ton in access fees, while EU vessels earned about $1,687 per ton at dock. In contrast, Pacific Island countries in the Parties to the Nauru Agreement (PNA) act as a bloc and set an overall cap that is allocated among members, selling comparable tuna access for much higher fees (e.g., $454 per ton in 2019). Across 2010–2021, African countries earned about $128 per ton on average, versus $307 per ton for PNA countries. Potential reasons African countries earn less include weaker enforcement against illegal fishing, biological differences (depletion, transboundary stocks), lower-priced species composition, higher transport costs to markets, and corruption in negotiations. Unlike these factors, which are hard to change quickly, the mode of selling access is actionable: African nations currently negotiate individually, whereas acting collectively could confer market power similar to OPEC in oil. The paper asks how a continent-level African coalition to sell access as a bloc would affect access fees, catch, profits, and fish biomass, compared to the current status quo of individual sales.

The paper situates African fishing access within broader resource governance and international fisheries literature. Prior work documents large foreign presence in African EEZs and relatively low access compensation, with possible drivers including: (i) weak monitoring, control, and surveillance increasing the expected returns to illegal fishing and depressing legal access values; (ii) stock status and spatial ecology (e.g., depleted or highly migratory stocks, or species mixes with lower market value) influencing willingness to pay; (iii) higher costs of transporting catch to markets; and (iv) corruption that can reduce negotiated fees. Comparative evidence from the Pacific (PNA) shows that coordinated seller behavior can substantially increase access prices and member country revenues. The authors note that these structural differences—especially seller-side market power—may explain observed fee gaps more than differences in biology or governance alone, motivating an analysis of a seller cartel for Africa.

Design: The study builds a bilateral oligopoly model (following Hendricks and McAfee, 2010) tailored to the international market for fishing access, allowing for market power on both seller (African countries) and buyer (foreign fishing nations) sides. The market mechanism sets an equilibrium access fee and quantity based on sellers’ and buyers’ strategic reports relative to their true endowments, capturing how each side can exercise market power by under-reporting biomass (sellers) or fishing capacity (buyers). The bilateral oligopoly is coupled to a bioeconomic (surplus production) model to translate access decisions into total catch (access plus non-access) and equilibrium biomass. Scenarios: Two scenarios are compared: (i) Status quo—32 African coastal countries sell access individually; (ii) Coalition—Africa sells access as a single bloc, holding all biological and enforcement parameters fixed. This isolates the effect of increased seller market power. Identification of market participants: Using Global Fishing Watch (GFW) AIS-derived fishing effort (2016–2020), the authors identify sellers as African EEZs and buyers as foreign-flag states with fishing hours exceeding a threshold in at least one seller’s EEZ. A fishing-hours threshold of 2,420 hours yields 32 sellers and 33 buyers. Robustness checks double the threshold with minimal changes in results. Buyer capacity: For each buying country, vessels are classified as distant-water fishing (DWF) if more than half of their fishing hours occur outside their home EEZ. True gross tonnage (GT) of the DWF fleets is summed from GFW vessel data to proxy buyer fishing capacity. Seller biomass and growth: True biomass per seller is parameterized with a surplus production (Pella–Tomlinson) model. The baseline assumes biomass relative to B_MSY of 0.8 (partially depleted), with growth parameters g aggregated from stock-level estimates weighted by carrying capacity (from Costello et al., 2016). Total catch h per country (2010–2018) is from Sea Around Us. Carrying capacity k and biomass are derived via model equilibrium relationships. Robustness explores alternative initial biomass assumptions (e.g., 0.6) and ranges for biomass ratios, yielding similar qualitative results. Equilibrium and policy functions: For each scenario, the Nash equilibrium in reports (seller biomass reports and buyer capacity reports) is solved via a fixed-point algorithm. The model yields equilibrium access fee and total access quantity (in model units). Access quantities are scaled to tons using EU public access agreement data (2010–2021): the status quo model fee unit 0.961 maps to $128.20 per ton (2020 USD), and total access quantity units map to 2.47 million tons. Country-level access policy functions (access catch vs. biomass) are constructed by varying each country’s biomass over its range and re-solving the equilibrium. Non-access policy functions are assumed linear in biomass, with slope computed from total observed catch minus model-implied access catch at status quo biomass; total catch policy is the sum of access and non-access policies. Coalition scenario allocation: In the coalition, total access quantity is determined for the bloc, then apportioned to countries in proportion to their status quo true biomass shares to construct country-level access policy functions. Non-access policy functions are assumed unchanged from status quo (a conservative assumption for biomass gains if coalition also improves control over non-access or illegal fishing). Equilibrium biomass: For each country, equilibrium biomass is the intersection of its total catch policy function and its biological growth curve. Continental biomass is the sum across countries. The comparison is between the status quo equilibrium and the coalition equilibrium after adjustment. Profits and fees: Access fees are converted from model units to USD using the EU-based scaling. Seller and buyer profits are computed from model-implied profits (fee and quantity units) and converted to 2020 USD with the same scaling. The study also simulates regional coalitions aligned with Africa’s Regional Economic Communities (RECs) and applies the same framework to the Parties to the Nauru Agreement (PNA) market as a reverse counterfactual (dissolving the PNA), for comparison. Parameters and robustness: Core parameters include ε1=1, ε2=2, μ=1 (and alternative sets such as μ=0.5, ε1=1.5) with results robust across plausible ranges. Multiple robustness checks explore misclassification thresholds, alternative biomass assumptions, and parameter variations, with consistent qualitative outcomes.

Continent-level (Table 1): - Access catch declines from 2.47 to 1.75 million tons per year (−0.72 million, −29%). - Average access fee increases from $128.20 to $152.30 per ton (+$24.10, +19%). - African seller profit increases from $162.5 million to $199.24 million per year (+$34.79 million, +21%). - Foreign buyer profit decreases from $363.15 million to $305.55 million (−$57.60 million, −16%). - Non-access catch increases from 9.46 to 10.36 million tons (+0.90 million, +10%). - Total catch increases slightly from 11.93 to 12.11 million tons (+0.18 million, +2%). - Total biomass increases from 117.20 to 136.12 million tons (+18.93 million, +16%). Country-level patterns: - Access catch declines in all countries (−24% to −36%). - Profits increase in all countries (+17% to +28%). - Total catch slightly increases for all countries as higher non-access catch offsets reduced access catch. - Biomass increases for all countries: from +2.3% (Angola) to +31.61% (Cape Verde). On average, biomass and profit rise by about 15% and 23%, respectively. Regional coalitions (based on RECs): - Modest gains relative to status quo: biomass +3 million tons (~+2%) and seller profits +$5 million per year (~+3%). Benefits are limited because regional blocs aggregate less market power than a continent-wide cartel. Welfare and distribution: - Total economic surplus (seller + buyer profits) is about 4% lower under the Africa Coalition, but this ignores non-market values of higher biomass, increased domestic non-access catch (48% of non-access catch is domestic), potential domestic welfare gains (food security, jobs), and equity considerations from shifting rents toward African sellers. Comparative PNA insights (reverse counterfactual): - Without the PNA coalition, access and total catch would fall (−22% and −33%) due to lower biomass; buyer profits would decrease by ~19%; seller profits would drop by about $113 million per year (−41%); total economic surplus would be ~27% lower. The PNA case underscores that strong seller coordination can raise both conservation and economic outcomes where access comprises a large share of total catch.

Forming an Africa-wide access-selling cartel would shift market power from foreign buyers to African sellers. By coordinating to restrict access catch, African countries would raise access fees and improve stock biomass. The bilateral oligopoly framework combined with bioeconomic dynamics shows that, despite reduced access catch, overall catch and profits can rise because healthier stocks raise non-access catch and sustain higher long-run yields. Foreign buyer profits decline, reflecting the redistribution of rents toward sellers. Although total economic surplus (sellers + buyers) falls modestly, unmeasured benefits—non-market ecological value, domestic food security, employment throughout value chains, and macroeconomic benefits from increased foreign exchange—likely improve overall welfare and equity for African nations. The country-by-country results indicate near-universal gains in biomass and profits with only modest changes in total catch, pointing to a conservation-aligned pathway to higher revenues. Regional coalitions offer limited short-term improvements due to insufficient aggregate market share, while a continent-level coalition delivers much larger effects. The PNA comparison reinforces that strong seller coalitions can simultaneously enhance biomass and economic outcomes, and that dissolving such coalitions can severely reduce both. Overall, enhanced integration and coordinated market design in fisheries access can address persistent under-compensation for African fishing rights while improving ecological conditions.

The study demonstrates that an Africa-wide fishery access cartel could substantially improve both economic and ecological outcomes relative to the status quo of individual-country negotiations. A coordinated reduction in access catch raises access fees, increases seller profits, and boosts biomass, with non-access catch compensating for reduced access, resulting in slightly higher total catch. Distributional impacts favor African sellers while reducing foreign buyer profits. Policy implications include considering continent-level coordination mechanisms (potentially building on existing African integration efforts) and exploring market design tools such as coordinated auctions to further enhance outcomes. Future research could refine estimates by modeling species-specific and stock-level dynamics, incorporating explicit enforcement and illegal fishing responses, and valuing broader welfare components (non-market ecological benefits, domestic consumption and labor market effects).

- Data and identification: Reliance on AIS-based GFW data may miss some fishing activity; buyer/seller classification via fishing-hours thresholds could misclassify participants, though robustness checks suggest limited impact. - Biomass and growth assumptions: Country-level biomass is inferred with a surplus production model and baseline B/B_MSY=0.8 assumption; true biomass estimates for many African stocks are scarce. Results are robust to alternative assumptions but still subject to structural uncertainty. - Policy function specification: Non-access policy functions are assumed linear and held constant between scenarios; if coalition improves control over non-access or illegal fishing, actual biomass gains could be larger (or smaller if non-access expands differently). - Scaling and calibration: Conversion of model units to tons and USD relies on EU access agreement data (fees and quantities), potentially biasing fee scaling if other buyers pay systematically different rates. - Model scope: Enforcement intensity, corruption, and stock transboundary dynamics are held fixed across scenarios; dynamic responses by buyers (e.g., effort reallocation) and sellers (e.g., domestic policy changes) are not endogenized. The bilateral oligopoly abstraction simplifies complex negotiations and institutions. - Welfare measurement: Reported total economic surplus excludes non-market ecological values and broader socio-economic benefits, so welfare comparisons are partial.