St Helena Online

Tag: economy

Trawler visit is first step to buying island boats, says Rob

Southern Cross could yield vital information about fish stocks. Picture by Bruce Salt
Southern Cross could yield vital information about fish stocks. Picture by Bruce Salt

St Helena could build up its own fleet of off-shore trawlers if exploratory fishing off the island’s sea mounts is successful, according to enterprise chief Rob Midwinter.

He said investors would demand proof that there were enough fish to catch before they would help island fishermen buy their own vessels – and visiting trawler Southern Star could provide it.

That could bring an end to years of frustration for Saints who have not been able to exploit the riches of their own waters, he said.

Rob, director of Enterprise St Helena, spoke after fears were raised that the African vessel’s short-term licence could be the start of overseas companies moving in on the island’s 200-mile fishing zone.

Saint FM Community Radio quoted one unnamed source saying: “Some of our local fishermen have been trying for the past 15 or 20 years to obtain a decent offshore fishing boat or two that could safely fish our sea mounts, but were never successful in raising financial support – only now to have our fish stocks ravaged by foreigners under the guise of an exploratory fishing licence agreement with St Helena Government.”

It said the Southern Cross had been successfully fishing the Bonaparte sea mount and by Sunday (23 June 2013) had caught 45 tonnes of big-eye tuna, with prospects of quickly achieving a load of 80 tonnes.

The station’s informant said local fishermen were worried by the impact on inshore fishing:

Southern Cross passes close to the RMS St Helena. Picture: Bruce Salt
Southern Cross passes close to the RMS St Helena. Picture: Bruce Salt

“We know for sure that this number of fish which swam into our exclusive fishing zone will never have the potential of reaching our inshore baited hooks and poles, on top of which it will be transported and offloaded somewhere on the African mainland in due course.”

But Rob Midwinter told St Helena Online that without the exploratory venture by Global Fish SA, the island fishermen might never fulfill their dream of raising funds for their own offshore boats.

The company had offered to train local fishermen and had an island observer on board.

Negotiations in 2010 led to four conditions being imposed on the temporary licence. They were:

  • No fishing within 20 miles of the island
  • Carrying a fisheries observer
  • Making data on catches available to the island
  • Offering Saints a chance to gain experience as crew members

In fact, the company offered to limit itself to fishing at least 30 miles offshore. 

Rob said: “We have on numerous occasions made it very clear to local stakeholders that our own ideal scenario is fully aligned to the long-standing plight of the local fishermen – namely, to see a small number of locally-owned and operated vessels fishing our sea mounts.”

But he said lack of physical evidence of the number of fish to be caught had long been a stumbling block in the way of funding, especially from British taxpayers.

He said: “Any funding body – public or private – will want to ensure risk of failure is minimised prior to making the level of capital investment that is needed.

“Funding bodies are not interested in hearsay regarding what local interests believe is currently available.

“They demand scientifically-based evidence to support the business case.

“The exploratory fishing venture that SHG has licensed has been structured in such a manner.”

He said it took into account concerns raised by government officials in the UK and members of the fishing industry task force set up under the previous governor, Andrew Gurr.

He countered complaints about lost catches by pointing out that the island is already missing out on potential earnings because it can only export frozen fish.

The island was also unable to protect its waters from illegal, unreported and unregulated (IUU) fishing operations, “which it is widely suspected have been going on for several years.” 

Global Fish was paying a fee, offering training, and providing data on catches – “and they are also providing an observation role in terms of deterring IUU activity.”

Rob said: “I am aware that it has been suggested that ESH is pursuing some form of hidden agenda in relation to our dealings with Global Fish, and that it is secretly our desire to see more foreign vessels operating within our waters, which is a complete falsehood.

“We do, however, wish to see the island benefit from the revenue that we believe can be generated from this industry, if it is developed in a sustainable manner prior to the airport opening.

“We anticipate that this could be the second largest economic driver for the island after tourism.

“We have consistently stated that we wish the local fishermen to work with us to achieve this goal, as we would like to see the local industry benefit from these developments.

“It is, however, also a fact that Global Fish have indicated that they would be interested in a longer term initiative, which could involve them working in partnership with local fishermen to address the funding issue that has been a barrier for so many years.”

He said it would depend on the size of catches made – and on further negotiations, including with the island’s fishing task force. Enterprise St Helena could help bring this about, he said, but was not the decision-maker.

Reap as you sow: why more money is needed for farming

New investment is needed for farming on St Helena after decades of under-funding, says the Growing Forward paper on island farming.

It says people have been discouraged from getting involved in agriculture because of a poor business environment – made worse by limited financial help.

Now the industry needs a “rake-over” to improve its image and attract more people to grow food commercially.

It says the government, Enterprise St Helena, the island’s bank all need to invest in farming – and so does the private sector.

“Insufficient investment in agriculture is one of the main causes of limited agricultural development and decreasing contributions to our food supply,” it says.

“Declining food production is linked, among other factors, to limited access to credit and financing, and a business environment which discourages private sector involvement in agriculture.

The key challenge to financing of and investment in agriculture will be to improve the image and business environment of the sector.”

Strategies for change include increasing funding “to establish a small number of motivated and professional producers providing constant and reliable supplies and delivering quality that meets improved trade standards.”

That could include seeking skilled people overseas.

Incentives for producers are also proposed, along with a review of import charges – which would help island-grown produce compete with imported food.

Food is the key to island life – and tackling its health crisis

A new body to promote food and healthy eating on St Helena is proposed in the island’s draft agriculture policy – even though it says food is already at the heart of island life.

And it says the new organisation could “make a significant contribution” to tackling hypertension by encouraging healthy eating. The island has one of the world’s highest rates for diabetes, which is strongly linked to poor diet.

The paper says agriculture is seen as having an increasing role in improving health, as well as being important to tourism.

The new body could provide recipes, encourage people to grow their own food, hold tasting sessions, monitor labelling and safety, and even set up an annual food fair, says the Growing Forward paper.

“The refurbishment of the market building will provide a focal point for the showcasing of local agricultural produce,” it says, “and bring growers and producers closer to each other and the community.”

The paper says new policy must take into account the island’s culture.

“Agriculture and food production, while very much viewed and managed as businesses, are also considered by those involved to be part of a way of life and a vocation,” it says.

“Change can be difficult in any case but can be especially challenging in a rural context where flexibility and mobility is constrained by low incomes, lack of other opportunities, lower educational attainment, a higher age profile and limited access to capital.

“The people of St Helena are highly skilled in the art of cooking and entertaining. Social unity and cohesion is food-centred on the island.

“Any agricultural policy that can assist in maintaining and developing this aspect of life is making a useful contribution to the social health and well-being of the islanders.”

Killer diabetes puts island under strain, says the Castle
Cut-price foods that left island with a bulging health problem

Small-scale growers ‘have a role’ as farming goes pro

Farming on St Helena needs to get bigger, better and more business-like, says the island’s draft agricultural policy.

But the document also recognises the role of small-scale producers – and their place in island life. 

“Agricultural enterprise on a commercial basis is practically absent,” says the Growing Forward document.

“The efficient management of resources, mechanisation, professional production methods, trade standards, and business skills and service quality is limited.

“Together, these issues threaten the future contribution of agriculture to our economy.”

The paper makes no reference to the launch of an egg farm on the island, or the increase in the number of crops being grown in polytunnels. Coffee-growing has also been revived on a limited scale.

Strong leadership and possibly even new laws are called for in the paper, which says producers need to have more influence. It says the Farmers Association needs to be given a stronger role and have help to become more effective.

Challenges include providing support services and incentives, and sharing skills and knowledge.

The economic strategy in the Growing Forward paper sets out ten priorities, including to:

  • promote professionalism and a business culture
  • explore research and development needs
  • set standards for trade and quality
  • build links between farming and tourism
  • invest in the most promising types of production
  • provide business and technical training

And it says the government should support small-scale growers and encourage more people to start their own small-holdings, but “with lower levels of resource allocation.”

People on St Helena have traditionally grown food alongside their paid jobs, for themselves or for profit, but there has been concern that the practice has declined, with islanders preferring imported goods.

The Growing Forward report recognises small-holders for “their contribution to food supply and the economic and social profile of the island.”

Coffee: how a bag of beans made St Helena a world-beater
Roddy brings an end to egg imports

LINK: Growing Forward – draft national agriculture policy paper

Extra £1.4 million is proposed to boost health and schooling

Nearly one and a half million pounds of extra funding will pumped into St Helena to improve health care and education, if UK ministers accept proposals from the 2013 aid mission to the island.

That is on top of £12 million to cover the ongoing shortfall in St Helena Government’s annual budget.

The £12m amounts to a slight dip in funding – less than one per cent – but if the extra £1.4 million is approved, the island will actually see an increase in aid.

The proposal has emerged from the annual Development Assistance Planning Mission (DAPM) to the island, which has seen UK experts negotiating with a team of eight island councillors and officials.

They have agreed an aide memoire that reveals concerns that health and social services targets were not being met.

The extra funding is “to fill critical capacity gaps in essential medical services and provide support for education.”

But the mission has warned that some savings plans looked unrealistic.

It said: “We were concerned that some directorates may have suggested savings that could not be realistically achieved.”

It did not say which departments caused concern – but alarm has been raised on the island about cuts in health spending.

Savings should be made through administrative costs, not front-line services, it said.

It also saw a big opportunity to save money through more efficient procurement – buying-in of goods and services – with no progress in the past year on adopting agreed guidelines. An adviser arrived in January 2013.

The aide memoire says the mission was pleased that it had not have to agree the Grant in Aid package, except on shipping.

The mission found a “mixed” picture on the island’s home-grown economy. Work on the airport had moved quicker than expected, pushing up employment and population, but it was unclear how much this had boosted wages in the rest of the economy.

Investment in tourism had been slower than expected.

Inflation had fallen to 4%, from 6% at the beginning of 2012, but this was partly due to the weakness of the South African Rand.

Domestic revenue was forecast to rise by a million pounds over the year, to £11.3 million in 2012/13, in line with predictions.

Growth of 13% is forecast in the next two years, dipping to 10% in 2015/16.

Income tax revenue had gone up by a third (35%), driven by airport activity.

Spending was also broadly in line with forecasts, “leaving a near-balanced budget.”

The mission welcome progress on supporting economic development and said Enterprise St Helena had built a good platform to move forward on its objectives.

The government’s budget planning had improved, to fit better with the priorities of improving health, education and economic growth.

Improvement in tax collection had been “modest”, but more substantial gains were expected in 2013/14. A new computer system should improve detection of tax evaders.

“A rigorous audit of taxation returns is planned,” says the aide memoire. Fees are to be reviewed.

The aid mission welcomed plans to publish meaningful information on the government’s performance. Information on the SHG website need to be easier to understand, it said.

Which comes first: the airline, or the eco resort?

Enterprise St Helena is locked in a “chicken and egg” stand-off with Shelco over its planned Wirebird Hill resort, according to Britain’s Financial Times newspaper.

Writer Horatio Clare says that St Helena – “perhaps the strangest of tropical islands” – may be about to experience “one of the world’s most unlikely investment booms.”

But while the island’s airport is under construction, the luxury eco resort at Broad Bottom is not.

“ESH… wants Shelco to commit to building their hotel so that an airline might commit for flights,” writes Clare. “Shelco wants ESH to produce an airline before they begin work on the hotel.”

St Helena Online has previously reported Shelco’s insistence on flights from Europe, which at one stage looked unlikely.

The FT also quotes Julian Morris, head of economic development, on the need for tourism: “I don’t think the island’s situation is very good,” he says. “Average wage £6,000, hospital’s poor, school’s extremely poor, 20 per cent of kids have got at least one parent working overseas.

“The island is earning £2 per person per day from its own activities, so we would  be one of the poorest places in Africa, and yet you drive around and it feels  like it’s a slightly poorer version of the UK.”

In fact, educational standards are reported to be rising rapidly, both at primary school and GCSE level – albeit from a very low base.

The article also quotes a visiting South African businessman, Duncan Grindley, who arrived anticipating “massive opportunity” for tented camps and walking tours.

By the end of the week, his attitude had changed, he told the FT: “Walking tours are out – you go 5km and you might as well have gone 50 because of the gradients.”

Read the full article here.

SEE ALSO: Doubt over eco resort as Shelco seeks direct flights from Europe

Price rumours ‘wrong’, says Owen, as inflation tumbles

Inflation in St Helena’s shops has fallen to its lowest level for at least five years, according to the island’s chief economist.

Owen James’s latest bulletin has scotched reports of “extremely rapid” price rises – and a “myth” that figures have been manipulated.

But the official figures do not take account of all living costs – especially increasing housing rents.

The island’s inflation figure is based on a so-called shopping basket of products: the prices of those goods in the shops are tracked in order to give an inflation figure.

Contrary to popular belief, inflation is not at 10%,” said Owen.

“Annual inflation on the retail price index stands at 3.9%, down by 2.2 percentage points from the previous quarter.

“Despite reports in the media, the last time annual RPI inflation broke the 10% barrier was over three years ago.”

He said annual inflation had averaged 6.1% over the past year – slightly below the five-year average.

He said: “There also seems to be a perception that inflation for low income households is higher than the average. The latest statistical news bulletin suggests this might not be the case.”

Figures suggested the opposite, he said.

“There is also a myth doing the rounds suggesting government adjusts the basket of goods and services used to calculate the RPI to suit its needs. This is not true.

“The RPI basket is based on a survey of households. This survey is carried out every eight years. The basket does not change during the interim and formulating it is a scientific process and not one which can be influenced by government or anyone else.

He said inflation rose last year for various reasons – including that people had more money to spend after changes to tax allowances and a government pay review. As that effect wore off, inflation had settled down.

And there was no rampant inflation in the countries St Helena traded with, said Owen.

He said the strength of the pound against the South African rand meant cheaper imports, “although this is not necessarily reflected in the price shops charge.”

Higher inflation could be the result of rising standards of living, he said.

“There are tentative signs of the economy growing. This should only continue as investment flows into the island and the airport project steps up its pace.

“The result of this should be an increase in wages. Consequently, inflation rates may increase, but that’s not necessarily a bad thing.”

Don’t destroy what makes St Helena special, warns director

Guests including His Excellency the Governor gathered at The Consulate

Attitudes to protecting St Helena’s environment must change if the island is to prosper, according to Rob Midwinter, director of Enterprise St Helena.

His comment, at the launch of the island’s new National Environmental Management Plan, followed decades of neglect that has seen historic buildings crumble and even the extinction of the St Helena Olive.

He said: “Whilst we are seeking to grow our economy, unless we also seek to change our approach to environmental management, we run the risk of destroying the very product that is ‘Destination St Helena’

“If we are going to have an increase in our population base by attracting Saints to return home, and also an increase in the number of visitors coming to St Helena, we need to ensure that the impact that these increases have on our environment is minimalized.

“We will also need to demonstrate the economic benefits to be gained by local businesses of adopting green practices, reducing waste and also dependence on the unsustainable practices of the past, including the landfill disposal of items that may present recycling opportunities for local business interests.

“However, if we are to encourage investment in such initiatives, we must do so in partnership, not merely between the public and private sector, but as a community, for the betterment of all.

“And not just for the enjoyment of the visitors that we are hoping to attract, but for our own enjoyment and that of the future generations to come.”

The environmental plan (NEMP) was officially launched at the Consulate Ballroom on Tuesday 9 October 2012 – by being ceremonially placed in the hands of Gemma Yon, a member of the island’s youth parliament.

The handover symbolised the document’s importance for the future of the island.

Short speeches were made by Gemma, St Helena National Trust, former councillor Michael Benjamin – who has a recycling business – and the craft charity SHAPE.

Tara Pelembe, head of the Environmental Management Directorate, said people needed to work together to protect the island’s special character: it was “Our Island, Our Environment, Our Responsibility.”

Economy chief responds to concern over Solomon’s role

Disquiet has been expressed over the fact that St Helena’s economic supremo has a place on the board of the island’s biggest company.

Julian Morris is head of the Enterprise St Helena development agency, which has the job of building a private enterprise culture on the island. He also represents St Helena Government on the board of Solomon and Company, even though he was understood to operate at arm’s length from The Castle.

Emails passed to St Helena Online complain of a conflict of interest, because Solomon’s is in competition with smaller island businesses that Julian Morris is supposed to be encouraging.

Now Mr Morris has acknowledged the potential difficulty. But he said the government wanted to develop the whole economy, and having a seat on the board of such a dominant company would help in that aim.

The government’s majority shareholding in Solomon’s, and the company’s dominance of the private sector, have long been seen as a block on the growth of a free market economy on the island. It had to take over the company in the 1960s when it was in danger of collapse, in order to maintain services on the island.

Saint FM radio station said: “Members of the local business community suggest that the chief executive post should be neutral to any particular private sector enterprise, and as a board member of Solomon’s, Mr Morris’s responsibilities are to protect the interests of Solomon’s shareholders.

“By implication this could be detrimental to the competitors of Solomon and Company.

“It has been said that Julian Morris’s appointment to the board of Solomon’s is a clear conflict of interest. It is likely we will see a heated debate about this topic shortly.”

There was some pressure within the island’s business community to raise a formal protest over Mr Morris’s dual role. But the chamber of commerce is understood not to have called for him to step down from the Solomon’s board.

It was acknowledged that there were few people on the island qualified to serve on the board of a large company.

Mr Morris said: “At the basic level there is potential conflict with any government, anywhere, owning a controlling part of a private sector enterprise.

“The Solomon’s situation has existed for many years; I believe not instigated by SHG, but borne out of a necessity to make sure the island was provided with important services.

“It is understandable, and would be expected, for any majority shareholder to have representation on a company board. When the previous SHG Finance Director came off the board, I was asked to be the replacement SHG representative because it was felt that my private sector experience would be very relevant.

“Also, SHG is interested in the whole Saint economy and I am responsible for economic development on the island. Being on the board means that SHG’s interests in developing the wider economy are represented at a board level, which is helpful, when Solomon’s are such a large part of the economy.

“As SHG’s current representative, I am ever mindful of these potential conflicts.

“Whoever represents SHG interests on Solomon’s there is always potential for conflict, whether it be with Solomon’s, or the wider private sector.

“Obviously, in an ideal situation, there would be completely clear separation of duties. However, on St Helena, in common with other small communities and organisations, ideal divisions are often not possible because of the underlying structures and the limited number of people available.

“This type of conflict is not restricted to Solomon’s: in a small community and market, many activities will conflict with other organisations and business.”

On 1 March 2012, SHG announced that it was discussing plans to sell off shares and cease to be the majority shareholder in the 220-year-old company.

This was seen by some as a means of helping to open up the island economy to competitors, include Saint-owned start-ups.

Serving the interests of St Helena Government (SHG) – whose policy is to encourage the growth of independent businesses – might mean ensuring that the company does not increase its dominance of the island economy.

Mr Morris said: “The issue of whether SHG should continue to hold a majority share or shares in Solomon’s is not a new question. As the economy develops, the option of adjusting SHG’s position will be kept under review.”

St Helena Government may sell off Solomon’s shares

Enterprise St Helena
Solomon and Company