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Case Study, Nigeria. What are critical resources that has given Nigerian exporters a positional advantage? Essay

Paper type: Case study Pages: 8 (1863 words)

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Demographics.The Gulf of Guinea houses the rich and narrow Nigerian continental shelf with a massive coastline of about 853km that lies on the Atlantic Ocean. Nigeria’s major cities are bordering the sea. Lagos is home to a vast population that is highly dependent on fishing as its economic activity besides petroleum and as elaborated by Oketoki, T. O. (2015) these cities are the Countries major shrimping zones just lying on adjacent to the vast Niger delta that is about 500km wide of river mouths, estuaries and lagoons.

The coastline of Nigeria is home to resources that if well utilized transforms to positional advantage. The country’s population of close to 200 million inhabitants provides ready and available cheap labor in the fishing sector besides giving a ready market. To further understand the source of Nigeria’s competitive advantages in the Shrimp and pawns sector that we are analyzing in this paper we need to establish the type of resources exposed to Nigeria then further investigate different orientation the sector used for growth and exploitation of its resources.

Historical situations that was exploited (colonial story -> British)Growth of the shrimping industryShrimping on the Nigerian waters was majorly artisanal and commercial industrial trawlers started in the early 1950s. In the late 70s Nigeria increased its fishing area by the exclusive economic Zone declaration giving it a up to an estimated of 210900 kmІ of fishing grounds in the maritime waters. According to the FAO 2008 Global study of Shrimp Fisheries, Organized fishing cooperatives societies benefited from a breakthrough of private sector involvement in 1980s as reported by Amire (2003). The private sector penetration led to high investments on a few medium sized vessels with trawlers that were operating in the inshore waters, five years later major investments were rolled out still by the private sector with up to 149 fishing and shrimping vessels that were able to bring up the harvesting capacity to 2 376 Mt of shrimps. Today? Shrimping and Its Economic Benefits FAO (2000) reports that the Shrimp Industry in Nigeria accounts for the second best income-generating sector for the country’s exports after Petroleum. Further discussion suggests that about half of the total shrimps harvested both from the artisanal and commercial vessels is exported to the developed countries with USA being the major market followed by Japan and EU. Some figures to show economic income fishing industry hasThe Fish CultureUnderstanding the importance and interdependence of the knowledge base exposed to the firm through the human capital is what the Nigerian Shrimp and Prawn Industry capitalized on, the country has a rich history of fish consumption and majority of the cities lie on the coastal borders of the Atlantic Ocean. The communities largely depend on fishing as a source on economic stability and they supply to the rest of the countries, making Nigeria the lead exporter of fish in Africa. High level Investments SMEs and firms to be specific manages to stand out in the market if they are able to use the different resources exposed to them effectively, the Nigerian Government sought High levels of investment into this sector from top key investors in the world that were after the Petroleum. Shell and —— as that has since started operations in the Shrimp Industry. This high-level investments approach has rapidly given Nigeria positional advantage over its neighbors. Investing into the shrimp industry in Nigeria is driven by the ability of the companies to produce and sell at a low price after taking into consideration all the transactional costs involved. This aspect gives the SMEs and the artisans in this industry competitive advantage over other key players, since the motivation for shrimp harvesting is associated with good prices in the ready market besides receiving investment push.In the recent years, there has been need for further improvement of the industry driven by the tremendous growth in the worldwide shrimp demands increasing with 3% p.a , majorly from the developed countries where USA accounts for an increase of 5% p.a. The need to satisfy the existing local markets and future demands has triggered the Country to look into Shrimp farming and majorly in the water of the Niger Delta that houses a conducive environment for the growth of Shrimps and Prwans. The Niger Delta.The Delta is a source of brackish water that creates a suitable environment for the shrimps and prawns to grow, due to the high levels of that acts as feed to the aquatic species. At the basin of the delta, fresh water mixes with salty water and this then acts as stable environment for the breeding of the shrimps. However, the local artisan fish in these regions and the increasing demands has driven the big vessels from the deep seas to come and seek these rich waters. This has received a lot of resistance from the local artisans hindering further exploitation activates in the fishing sector if no streamlined policies are be in place. The local population resist the invasion by the big vessels in an effort to protect the ecosystem that allows the growth and breeding of fish, this is majorly due to the high economic benefits the fish industry has for the locals of Nigeria. Succumbing to the economic pressures, Countries like Nigeria has sought further waters in the Niger Delta to keep up with its needs to supply the local Market besides the increasing demands for exports to the developed countries. An approach that has been hit by criticism due to its vast environmental degradation that lead to loss of Biodiversity and conflicts between the artisans and the Large Vessels anglers. Orientations- A growth oriented Approach and resilience. To investigate the fishing capacity and its economic impacts in Nigeria a research was conducted by Yetunda & Falaye (2007) in the years 1992-2001. The results were shocking and the Shrimp Industry was reported to be operating above Sustainable measure. The best fit for Shrimp Harvesting was estimated to be 89 Vessels with a total production of 10000000 Kgs for this period, but the sector had registered above double the carrying capacity. Operating above sustainable levels, with an average of 195 vessels licensed that were giving a yield of up to 8,00000000 kgs in the same period.According to Adewumi Adejoke, A. (2015) Nigeria currently operates over 173 vessels licensed for trawling. Each year the country economically benefits from the Industry an amount of US$65million worth of exports to the EU, the USA and the rest of the world. Nevertheless, the impact of the industry on employment will be massive and would benefit highly the SMEs in Nigeria. Shrimp farming alone is projected to increase from 3,306 to 83,950 jobs in 10 years. If well operated the Nigerian Shrimp industry will benefit by gaining a higher market share growing rapidly from $56 million to over $300 million worth of exports in a span of 10 years a move that will give the industry a bargaining power as well as competitive advantage. With necessary research and incremental changes of the industry the Nigerian shrimp industry would take up the Asian model of shrimp farming but collate it with indepth studies to deal with the failures that occurred in Thailand, China and other produecers of The growth will be greatly attributed to the fall of the Asian shrimp farming disasters, citing diseases outbreaks and a rapid decline of the business five years shortly after investing. However, this comes with other interpretations and problems of overfishing and its environmental impacts that saw Nigeria slapped by an export Ban by the United States. The industry in the Nigeria in an effort to fight the ban that was recently placed by the United States of America acted first and implemented the TEDS system in monitoring their nest, a system that had been proposed years decades ago but had not been effected. This quick response was in order to avoid further trickle effect to the EU who are the major Market. Policies and Strict RegulationsAllowing private sector involvement in the industry but still maintaining high monitoring rights by the government has really worked well for Nigeria. The government controls through licensing authorities that are to inspect the investment shrimp industry prior to it taking place. Taking key decisions in matters management and production and in accordance the laws and orders inscribed by the Fisheries Boards. This has been achieved through allowing artisanal producers ability to supply to the local markets that show high demand and at the same time investing in the mass production of fishing through deep-sea trawlers in the deep waters of the Nigerian Coast. An inspection unit has been put up to monitor the fishing activities in the waters on Nigeria, ensuring key guidelines that are set are being followed, with some officers of this unit deployed on the fishing vessels to monitor their operations. The cost of illegal fishing is high with fines of up to US$250 000 besides jail terms and other fines. This discourages illegal fishing Technology Orientation. Suggestions by Porter, M. E. (1985) drive us into thinking that being able to realize and identify key Technology along the production chain of your business is key into driving your firm to competitive advantage when the right information is used well.Vertical integration and cooperationAs discussed by ICES/FAO (2005), the Nigerian waters have had major adjustment into helping the cooperation of both commercial and the artisanal/Local fishermen. Success of integration and working together has been through government control and strict measure put into the water zones that the two groups fish. Large vessels of 23.2m of length are only allowed in the shrimps zones and have also have been restricted into entering fishing zones meant for Artisanal inshore and offshore waters, a move that protects the SMEs. The vessels go through screening by the inspection authorities taking into consideration minor details like, separating fishing vessels from the vessels that are for shrimps fishing. Strict regulations and policies that are followed has helped the growth of the shrimp industry in the Nigerian waters and further investigation into mitigating the coastal conflicts and Pirate operations on the waters will attract more investment into the Shrimp & Pawn Industry. Sustained competitive advantage. According to Barney, J. (1991) firms/Industry’s physical and intangible assets give the sustained competitive advantage and steers it into great success in its performance and operations. In Nigeria’s Shrimping industry, there have been major indicators that contribute to the ability of the industry to have a well-sustained and stable competitive advantage in the market. Value of the resource it houses is a key aspect; secondly, the country realized how unique the resources exposed to them are to the product that they produce, and not forgetting the continued look at easiness of production or imitability besides being able to have an exchangeable product or technique in operations.References. Yetunda, E. A., & Falaye, A. E. (2007). Economic Analysis of Industrial Shrimp Fishery in Nigeria. Joernal of Fiheries International, 2(2), 171-177.Barbier, E. B. (2012). A spatial model of coastal ecosystem services. Ecological Economics, 78, 70-79.Oketoki, T. O. (2015). Survey on phytoplankton biomass and water parameters in the habitats of invasive tigers shrimps (Penaeus Monodon) in Nigeria. Fisheries and Aquaculture Journal, 6(4).

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Case Study, Nigeria. What are critical resources that has given Nigerian exporters a positional advantage?. (2019, Aug 20). Retrieved from https://studymoose.com/case-study-nigeria-what-are-critical-resources-that-has-given-nigerian-exporters-a-positional-advantage-essay

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