Economic analysis of tilapia cage culture in Lake Victoria using different cage volumes
Safina Musa, Christopher Mulanda Aura, John Okechi
Abstract
The economic viability of tilapia cage culture in Lake Victoria was assessed using a profitability analysis model as the main decision support tool. One and five cages of 8 m3 (A), 62.5 m3 (B), and 471 m3 (C) were assessed. The break-even price (US$4.6 kg−1) for one cage of A appeared higher than the tilapia farm gate price in Kenya (US$3.5 kg−1), suggesting unprofitability of the venture. The decreased break-even price relative to increase in cage numbers showed economies of scale throughout the cage volume ranges. The longest payback period (PBP) for A (8 years) implied a risky venture. This was reaffirmed by an internal rate of return (IRR) of < 50% and negative Net present value (NPV) in the first two years of operations. The study affirmed the economic viability of operating large cage volumes (B or C) for Nile tilapia and for broader applicability to other Great Lakes.