Namibia generates millions in second government fish quota auction
Namibia has announced a successful government fish quota auction that raised NAD 189.9 million (USD 14 million, EUR 11.5 million) for the government from the sale of 15,948 metric tons (MT) of hake.
The auction on 16 April, attracted 38 bids and raised NAD 156.1 million (USD 11.4 million, EUR 9.4 million) at the primary sale after the bids were whittled down to 23, according to a joint statement by Namibian Finance Minister Ipumbu Shiimi and Namibian Fisheries and Marine Resources Minister Derek Klazen.
They described demand during the auction as “strong,” although 15 of the prequalified bidders were knocked out after failing the bid security deposit and bank guarantee requirements.
Although bidders applied for 46,858 MT of quota, only 15,020 MT were valid in the auction that attracted NAD 404.3 million (USD 29.6 million, EUR 24.2 million) in total subscription.
Sales during the primary auction involved 11,164 MT of wet hake for NAD 131.1 million (USD 9.6 million, EUR 7.9 million) and 2,000 MT of freezer hake at NAD 25 million (USD 1.8 million, EUR 1.5 million).
However, quota for 2,784 MT of hake went undersubscribed, forcing the auction into a secondary phase that successfully allotted the quota with 1,484 MT and 1,300 MT sold as wet hake and freezer hake, respectively. The sale raised NAD 33.7 million (USD 2.5 million, EUR 2 million).
A total of NAD 183.9 million (USD 13.5 million, EUR 11 million) has already been deposited into the Namibian State Revenue Fund at the Bank of Namibia and the balance of NAD 6 million (USD 439,000, EUR 359,000) will be settled next week, according to the ministers.
The ministers said the auction was “to determine the correct value of Namibia’s fishery and resources with the view to ensuring that the country fully benefits from her natural resources.”
The scheme to auction the government fish quota in the second quarter of 2021 was launched in October 2020 and a technical committee was formed to oversee its implementation. The plan came shortly after the first-ever auction of government-held fishing rights ended in disappointment after the sale attracted bids for 1.3 percent of the USD 38 million (EUR 32.3 million) in quota that was on offer.
The auction involved 11 000 MT of hake, 72,000 MT of horse mackerel and 392 MT of monkfish, and attracted 52 bidders, although only 13 were picked as the highest successful bidders. But even of the 13 preferred bidders, Shiimi said “many did not keep their payment commitments.”
The outcome of the April 2021 government fish quota auction was improved, according to Shiimi and Klazen, who said the improved prices from the per-ton reserve sale of NAD 6,000 (USD 439, EUR 359) to NAD 11,745.90 (USD 859, EUR 704) for wet hake and NAD 8,000 (USD 585, EUR 479) to NAD 12,508.50 (USD 915, EUR 749) for freezer hake is evidence the “hake auction was a success.”
“Such an outcome confirms auctioning as a good mechanism to facilitate price discovery in the sector and allocate natural resources to the market,” Shiimi and Klazen said in a joint statement.
Shiimi and Klazen said they are optimistic the same auction principles will be used in subsequent auctions for other fish species, with the next horse mackerel auction scheduled for 18 June, 2021.
Photo courtesy of the Office of the President of Namibia