Madagascar rocked by fishing deal that never was

A US$2.7 billion fishing deal with China appeared from nowhere – then disappeared

Fishermen bring ashore their traditional canoe (Image: Ning Hui / Initium Media)

It’s almost three in the afternoon, and 86-year-old Sikina becomes friendlier when she sees her two sons approach on their little wooden boat. A minute ago she was waving away my camera. Now she says I can interview her if I buy her a bottle of beer. But don’t bother her sons, she warns me, they haven’t eaten since setting off fishing at 4am.Her sons are twins, in their fifties. They bring their boat in to dock and waste no time in rinsing their catch and preparing a meal. The family of three don’t have much food for the day: one large fish weighing less than a kilogram, three smaller fish, and an eel. A normal catch in this fishing village – enough to eat, not enough to sell.

Sikina is hungry. She watches as her sons prepare the meal, telling me that when she married into the village 50 years ago the boats came back with 150kg of fish.

This is a small fishing village on the western coast of Madagascar, just across the bay from the port city of Mahajanga. Head west from here, and you reach mainland Africa. Madagascar, Africa’s largest island, split from the Indian subcontinent 80 odd million years ago. It is a paradise of natural resources and biodiversity. At 580,000 km2, it can be easy to forget it is an island.

Amir, Sikina’s neighbour, is fixing his boat nearby and can’t help but laugh when he hears what she says. He tells me she’s joking. The best catches he recalls were ten years ago – 30-40kg a trip. Now it’s normal to catch only 2kg in an entire day. I asked Sikina what she would do if there were no more fish. She stood up and shook her head as she chased me off to buy her beer, saying that could never happen. Hearing this, Amir’s young wife, playing with her daughter, shook her head at me, saying fishing was becoming less reliable and they were preparing to move and look for new opportunities.

This was in August 2019, when I’d visited the village to learn about an ambitious new fishing deal. A year earlier, a “blue economy” deal had been signed in Beijing, which would have seen investment of US$2.7 billion (about 19 billion yuan). Madagascar is one of the world’s poorest nations, with 75% of the population living on less than US$1.90 a day. Before visiting the village, I met with someone who outlined the deal to me. He pointed out that Madagascar’s GDP in 2017 was only US$11.5 billion, making a US$2.7 billion investment hugely important, and that Mahajanga would be one of the trial investment sites. One of the promises made was that there would be fishing work for people like Amir and the twins.

But that trial, and the whole investment plan, turned out to be a mirage.

A Madagascan fishermen walks along the beach
Facing increasing pressure, traditional fishermen are being forced to move from the south to the north of Madagascar (Image: Ning Hui / Initium Media)

‘The Chinese are coming’

Go back a year. On 3-4 September 2018, the Forum on China-Africa Cooperation was held in Beijing. Having first taken place in 2000, the forum is held every three years, attended by China, all African nations which have diplomatic relations with China, and various African organisations. After the two-day summit, it is usual for the media to report on big deals signed between Chinese and African firms – big investment deals, signed under a banner of “win-win cooperation” as heads of state look on, have always been a feature of the forums.

The 2018 forum was particularly successful: railways in Sudan, a business district in Egypt’s new capital, mining in South Africa, a basket of marine projects in Guinea, finance underwriting in Ghana. And on 5 September, in bustling Beijing, another deal was signed on the fringes of the forum: the Madagascar “blue economy” deal.

The news reached Madagascar the following day, 6 September. Articles were accompanied by a photo of the signing: officials from both sides, suited and booted, national flags on the table, clutching copies of the agreement as they shook hands for the cameras. For Madagascar, Hugues Ratsiferana, head of the Madagascan Agency for Economic Development and Business Promotion (AMDP); for China, Mao Jinrong, owner of a 99% stake in Taihe Century Investment Developments. And in the back row, Hery Rajaonarimampianina, at the time president of Madagascar.

On 7 September, the Midi Madagasikara newspaper had more details: “US$2.7 billion of investment over 10 years”, “directly creating at least 10,000 jobs”, “first three-year stage to start late 2018”, “the first inshore fishing firm will have a fleet of 330 boats.” And there was a quote from the president: “For our Chinese partners, this framework agreement is part of a global initiative, bringing the new silk road to Madagascar.”

Joelison Razakarivony, project official with Madagascan NGO Alliance Voahary Gasy (or Nature Alliance), read the news that day and called a colleague in a panic: US$2.7 billion? Three hundred and thirty fishing boats? This would be the biggest ever investment in Madagascar’s fishing sector.

Razakarivony soon realised that almost all of the civil society bodies working in Madagascar’s fishing sector, and even the government’s own environment ministry, had learned of the deal from the media. It even emerged that the fishing ministry had not been consulted prior to the deal being signed. On 5 October, Augustin Andriamananoro, fisheries minister, confirmed this during a television interview, and spoke out against the deal: “If we are not careful, this will lead to over-exploitation of our ocean.”

Madagascar has a longer coastline (4,828km) than any other nation in Africa, and an exclusive economic zone of 1.22 million km2. Fishing, and in particular traditional fishing, is a crucial source of food and income for coastal communities. But conflict between traditional fishers and local or overseas fishing firms has worsened in recent years. Commercial fishing is a hugely sensitive topic.

Voices were soon raised in opposition to the deal. On 26 September 2018, the director of the WWF in Madagascar wrote in a newspaper comment piece that “not everything that happens on the ocean is ‘blue’”.

On 1 October, 25 NGOs issued a joint statement, saying: “The deal threatens 500,000 fishermen in Madagascar, along with marine ecosystems and life.”

Traditional vs industrialised fishing

That village across the bay from Mahajanga is called Katsepy, and it lies in rich fishing grounds. The Betsiboka river flows from the mountainous interior to enter the sea here in Bombetoka bay, which is home to the island’s largest mangrove forest. The 450km coral reef off Madagascar’s west coast has always provided good fishing.

The mangrove forest and the coral reef co-exist: the forest absorbs sediment carried into the sea by the river; the reef absorbs the power of the waves. Both provide habitats for marine animals. Sikina’s recollections of easier fishing half a century ago were no joke. Since industrialised fishing started here in the 1960s, coastal fishing has seen huge changes.

The tools of traditional fishing have not changed. The local boats are known as lakana, or pirogues in French, and have been used since the Austronesian people landed here 1,500 years ago. They are long narrow canoes made from a single tree trunk – with an outrigger to make distant-water fishing possible.

Not all fishermen can afford one. A lakana costs around US$1,400, then there are nets and ice to buy. So some more business-minded fishermen put their own small fleets together. Andriantsifenana Honore Jonah, 35, started fishing when he was 20. Now he has three traditional lakana and four with motors. Six or seven people work his boats, and he takes 70% of any catch.

Preparing to set sail from the Madagascan port city of Mahajanga
Preparing to set sail from the Madagascan port city of Mahajanga (Image: Ning Hui / Initium Media)

He has the boats sail three or four days south, to avoid the other fishermen around the port and reach less-depleted fish populations. A week’s fishing in those quieter waters can net 500kg, 80% of which gets sold to fish processors in the port, mostly for export to Europe and Asia. Madagascar doesn’t consume much itself, exporting 80% of its seafood.

The fishermen working for Jonah often run into industrial fishing fleets when they are out. They are particularly visible at night, as they are brightly lit. But they don’t know what fish they are catching, if they are working illegally, or where they have come from and where they are heading.

Jonah heard about the Chinese deal from a friend. He cannot imagine what US$2.7 billion or over 300 more boats would mean. His fishermen get anxious when they see two or three boats of unknown origin.

“Will there be any fish left in five years?” he asks.

Madagascan fishermen head out to sea from the small fishing village of Katsepy
Fishermen head out to sea from the small fishing village of Katsepy (Image: Ning Hui / Initium Media)

For the traditional fishermen who stick to inshore waters, it is bottom-trawling shrimp boats, mostly owned by local firms, that have the greatest impact. Bottom-trawling is the equivalent of felling an entire expanse of forest – habitats are destroyed, flora and fauna decimated and economic sustainability harmed.

Further offshore there are bigger boats, from Europe, Korea, Thailand and China. These foreign boats have been working here since the 1980s, primarily in search of tuna and shark. They rarely call into Madagascar’s ports, whether they have a fishing license or not, but sail off once they have their catch. Madagascar doesn’t have the port and logistics infrastructure necessary to service these boats and create added value for its economy.

Almost everyone agrees there’s less to catch from the inshore waters now. Data I was given by the fisheries ministry in August 2019 puts the predicted catch for the year at only half of that in 1992.

The fishing firms and the government blame the traditional fishermen, for cutting down mangrove forests and catching too many fish. Justin Vahoavy Retenany works for the Mahajanga branch of the Fisheries Surveillance Centre (CSP). The centre was founded in 1999, as Madagascar first noticed fish populations were plummeting. He says the problem is the increasing number of fishermen. He takes a count at the mouth of the bay every morning:

“There are 400 boats heading out every day.”

But the fishermen blame the commercial fishing sector for squeezing them out. Illegally caught fish account for about one quarter of the catch on Africa’s coasts. Monitoring ocean fishing is hard, and the CSP has only two patrol boats – one of which has broken down – and patrols and fuel are expensive. In 2018, Retenany says, only 30 days of patrols were carried out.

According to a 2011 academic paper, 4.7 million tonnes of fish were caught in Madagascar’s waters between 1950 and 2008 – twice as much as reported in government figures. The scale of illegal, unreported and unregulated fishing causes huge economic damage.At the same time, more people were moving from the highlands of central Madagascar to the coasts in order to make a living, swelling the ranks of the fishermen. When fish started to become scarce in the south, they moved to the north. Where will they move next?

Madagascar’s fishing sector is vulnerable: oversight is weak, infrastructure is lacking and fisheries are used unsustainably. Huge overseas investments were just another cause for concern. In 2017, six Chinese fishing boats were granted permits to catch fish and crab off the south of the island, causing panic among local fishermen who claimed the Chinese boats used inappropriate fishing gear. Those permits ran out at the end of 2018, and in early 2019 the fisheries ministry announced the boats would no longer be permitted to work, and their fishing gear was confiscated.

A smal catch of fish in a basket. In recent years, catches off the coast of Madagascar have been shrinking
In recent years, catches off the coast of Madagascar have been shrinking (Image: Ning Hui / Initium Media)

Non-existent bodies

The US$2.7 billion fishing deal was a major topic of conversation in Madagascar that summer. A letter opposing the deal posted online soon gathered 20,000 signatures. Even taxi drivers in the capital Antananarivo would complain about the hundreds of Chinese fishing boats that would be arriving.Recalling the controversy, Joelison Razakarivony remembers thinking that “this Chinese company can’t know much about Madagascar.”

“If they’d sent someone to Madagascar, or read our constitution, they’d have known the president there at the signing was due to resign two days later, meaning huge political risk for the deal. And if they’d sent someone to check out the AMDP [Madagascan Agency for Economic Development and Business Promotion] they’d have realised it isn’t a government body, and a deal it signed wouldn’t necessarily have government support.”

And it’s true, before that signing ceremony few had heard of the AMDP. And if you try and figure out its origins, things get interesting.

The AMDP could be confused with another body with a similar name, the Economic Development Board of Madagascar, or EDBM, but they are entirely separate. The EDBM is part of the president’s office and was set up to encourage private investment and support investors. The AMDP, despite the “agency” in its title, is nothing to do with the government.

In 2016, the Forum Francophone des Affairs (FFA), which encourages cooperation between French-speaking nations, held a summit in Madagascar. The AMDP was a private association set up in partnership with the FFA, registered under the FFA’s Paris address. Its Madagascar office is in the Organisation Internationale de la Francophonie (OIF) office building in Antananarivo.

The AMDP had close links to Rajaonarimampianina, president at the time the fishing deal was signed. AMDP head Hugues Ratsiferana was a special advisor to the president, and the president’s nephew had a seat on the AMDP’s board.

According to a source of the Madagascan Investigative Journalist’s Alliance, the original AMDP had disbanded in August 2017, and the AMDP which signed the deal in Beijing only officially registered in Madagascar on 19 September 2018 – two weeks after the signing.

By which point, the president was no longer the president: he resigned on 7 September, the same day news of the deal broke, in order to contest the presidential elections due that November.

Seeing the controversy over the deal, the former president soon realised his association with it would do him no favours. A month later, on 4 October, he decided to forget what had happened in Beijing, saying in an interview with Radio France Internationale: “I have no knowledge of the deal.”

Madagascan women bring a fish catch into their village
Bringing the catch to the village (Image: Ning Hui / Initium Media)

Unreliable narrators

“It’s civil society that is obstructing the project.” In late July 2019, I interviewed Ndriantiana Ratrimoarivony in a five-star hotel in Antananarivo. “These civil society groups and other organisations get scared as soon as they see ‘foreign investment’, they think the foreigners will just come and take the fish.”

Ratrimoarivony worked closely with Hugues Ratsiferana, the head of the AMDP. Several NGO representatives, including Joelison Razakarivony, told me he is actually Ratsiferana’s brother-in-law. He did not mention that relationship, only saying that he is an economist who runs a consultancy and provided advice on the deal two years ago.

On 31 October 2018, Ratrimoarivony sat down with over 30 fishermen and civil society representatives and explained: “The deal involves private companies from the two countries. It isn’t a deal between the two countries themselves.” In other words, there was no obligation to reveal the content of the agreement.

It was Ratrimoarivony who told me Mahajanga would host a trial of the project. Though none of the people involved in the industry there I spoke to had heard anything about it. He said: “The fishermen and organisations haven’t realised the Chinese company is a very good partner.”

Even the threat of 330 new boats had been exaggerated, he said. “The investment will go to local fishermen for bigger boats, 14 or 15 metres long, to replace their traditional boats.” In written correspondence, Hugues Ratsiferana had told environmental media outlet Mongabay that the investment would mean 300 14-metre boats with 1,200kg cold-stores for local fishermen, with the other 30 boats being 28-meters long. But the details were not reassuring: those boats alone could catch 130,000 tonnes of fish a year – or Madagascar’s entire catch for 2016.

Ratrimoarivony has faith in the Chinese company: “It’s a very big Chinese company, with a shipyard there.” But he himself has never met any representatives of Taihe Century.

Taihe Century was founded in 2013, in the Beijing district of Haidian. However, in September 2015 and October 2018 the company was listed as “operating irregularly” by the Chinese authorities as it could not be contacted.

Of investments made by Taihe, only one, made two weeks after the Madagascar deal was signed, has anything to do with fishing – the creation of Fujian Julong Fisheries Ltd. On 16 September (within two weeks of the deal) a Chen Chun took over from Miao Jinrong as legal representative of Taihe, with the company’s registered capital at 160 million yuan. But according to the company’s 2018 annual report, its total assets were only 10 million yuan.

According to the media, Miao Jinrong was included on a list of defaulters issued by a court in Jiaocheng, Fujian, in 2018, owing 8.07 million yuan and interest. However, he did not appear on the most recent list of defaulters issued by the Supreme People’s Court.

An internet search with the keyword “shipyard” turns up another Miao Jinrong company – North Pole Hengtai Enterprises Property Development, with a director named Guo Zhenzhong. Guo is a shareholder in Fu’an Huan’ao Shipping Development. But that shipyard was caught up in China’s first shipbuilding-based scam investment scheme, involving over 12,000 people and 21 suspected criminals. The scam involved purchasing a shipyard and inventing 100 billion euros of orders for 2,500 ships, then attracting investors with promises of huge returns after future initial public offerings in Shenzhen and Hong Kong.
Journalists in Madagascar approached the Chinese embassy for comment when criticism of the Taihe Century–AMDP deal was at its peak. The embassy responded: “We were surprised to hear of the 330 boats to be sent to Madagascar,” going on to say “the contents of this agreement escapes the Embassy as well as the competent authorities of China.”

According to Joelison Razakarivony, AMDP complained at the time that the criticism was delaying a visit by Taihe Century representatives. But soon after, with question marks still hanging over Taihe’s ability to make the US$2.7 billion investment and enrich local fishermen, AMDP disappeared.

Hery Rajaonarimampianina was knocked out in the first round of the presidential election, with only 439,000 votes – 8% of the total. Andry Rajoelina, 45, won and made Augustin Andriamananoro, the fisheries minister who had opposed the deal, executive manager of presidential projects.

On 1 February 2019, the Madagascan police arrested Hugues Ratsiferana for suspected misuse of state assets. According to reports he was caught red-handed, with office equipment, computers and furniture from the Organisation Internationale de la Francophonie office in his home. He was quickly sentenced to a year’s imprisonment.

In August 2019, I went to AMDP’s former offices to ask around, but the new receptionist had never heard of it. The floor formerly occupied by AMDP is now being used by the new president, for his presidential projects office.

The Madagascan fishermen’s families had been awaiting their return
The fishermen’s families had been awaiting their return (Image: Ning Hui / Initium Media)

A lasting appetite

When I met Joelison Razakarivony, he repeatedly asked me for confirmation: “The deal has been stopped, hasn’t it?”

The new president hadn’t said anything in public, but with AMDP dropping off the radar, the deal has come to nothing.

Razakarivony put his file on the deal to one side. There were plenty of other more pressing challenges to deal with, such as a fishing deal with the EU.

There have been EU–Madagascar fishing agreements since 1986. The most recent, which concluded in 2018, saw over 100 EU boats working in Madagascar’s exclusive economic zone. A new round of talks is underway, with Madagascar hoping to get a better deal, referring to a favourable deal the Seychelles struck with the EU as a benchmark.

The EU paid 6.1 million euros to Madagascar for the 2015-2018 fishing deal, with 2.8 million euros spent on improving fishing policies. An additional 60-70 euros were paid by the boat owners for each tonne of fish caught. “In the Seychelles, the EU paid 15 million euros over the same period, half of which was allocated for supporting the local fishing industry.”

The EU’s Common Fishery Policy commits to protecting coastal fishing communities, but this is rarely done. According to research published in Marine Policy in 2012, the EU’s quota in Madagascar’s waters has increased 30%, while payments have fallen 20%. Government income from the deals, meanwhile, has fallen by 90%.

And of course, China’s appetite for Madagascar’s fish won’t disappear. According to the Weihai Marine Development Bureau, on 11 September 2019 four 1,300-horsepower trawlers set sail to fish in Madagascar’s waters – the first time fishing vessels have left Shandong province for Madagascar.

According to news reports, the bureau explained that with Chinese fishing vessels under pressure off West Africa, they are looking for new fishing grounds: “There are still undeveloped fishing grounds in the Indian Ocean and off East Africa,” and so Weihai’s fisheries authorities have “been examining potential locations in recent years.” They described this first journey by those four trawlers as “of huge significance for the large-scale development of distant water fisheries off East Africa.”

Originally published by Initium Media, translated and republished with permission.

The reporting was jointly conducted by Ning Hui and Riana Raymonde Randrianarisoa. This article was developed with the support of the Money Trail Project.