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Premix fuel subsidies continue because it enriches govts more than fishermen - Economist

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Tue, 9 Mar 2021 Source:

The Director of the Environment and Natural Resource Research Initiative (ENRRI – EfD Ghana), Prof. Wisdom Akpalu is accusing governments (past and present) of encouraging the practice of subsidizing premix fuel for fisherfolk as a way of redirecting monies for their selfish interests.

He said that with the country losing as much as GH¢200 million every year from subsidies it places on premix fuel, it makes it a lucrative business for people in government because eventually, not all the benefits of such subsidies go to the intended fisherfolk.

Prof. Wisdom Akpalu, who is a Fisheries Economist and the Dean of the School of Research and Graduate Studies at GIMPA, made this known during a presentation at a roundtable discussion on Fisheries Regulation and Enforcement in Ghana at the Ghana Institute of Management and Public Administration (GIMPA).

"In 2016 alone, this cost the nation about GH¢146million per subsidy, so this is huge. Then comes a very interesting issue. This is about leakages: when the premix fuel is subsidized and fishermen are supposed to pay approximately 30-40% of the market value, only a fraction of the premix fuel ends up with the fishermen; the rest are diverted.

“According to the 2017 report, written by one of these organizations, there were about 200 diversions only that year alone. As a researcher, I decided to take some statistics from different fishing vessels, to find out how much premix fuel they buy from the open market. And then after that, did a few computations… then discovered that huge quantities of these fuel don’t actually go to these fishermen. I don’t know where it goes to, so that one, I can’t tell you where it went to but they don’t go to the fishermen, and this is the incentive that is driving the subsidies: subsidize it, pretend that they are going to the fishermen, send it somewhere, sell it and then put the rest of the money in their pocket.

“So, when it goes to the … market, it becomes twice the value that the fisherman pays and then they sell it for 60% of the original price and then people benefit; I don’t know who,” he explained.

The fishing industry contributes about 4% annually to the total GDP of the economy, with approximately 15% annually to Agricultural Output, and an export revenue of about US$15million annually.

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