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The effort data based on actual fishing (canoe-days per year) in descending order was 180 for hand lines, 150 for scoop nets, 135 for gillnets, cast nets and traps, 120 for lift nets and long lines, 48 for beach seine nets and 3 for encircling nets which were operated once in 4 months for harvesting or cropping the fish shelters. The corresponding annual catch (kg/canoe) i.e. the mean catch per day multiplied by the effort data was 757.35 for gillnets, 650.70 for cast nets, 608.85 for traps, 897.60 for stow nets, 1,704.00 for lift nets, 769.20 for long lines, 460.80 for hand lines, and 6,840.00 (or 6.84 metric tones/canoe) for encircling nets. Table 2 shows the annual production costs and revenues from small-scale fishery in Lagos lagoon in 1994. The initial capital investment or fixed costs were the prevailing prices of fishing inputs. They included the cost price of the fishing gear (net, hook or trap) including netting materials, twines ropes, lines, floats and sinkers, lantern, torch light and other accessories and the wooden canoe as well as the cost of procurement of out board engine or paddle for canoe propulsion. 93% of the canoes were moved with paddles to and from the fishing grounds. Only 6% of the canoes were motorized or propelled with 8 – 15HP out board engines mainly for gillnetting, beach seining as well as the tendering of fish shelters and the operation of the encircling nets. The capital investment for non motorized canoe fishery ranged between N7,250.00 for hand line and N42,750.00 for stow net fishery.

The initial capital costs for motorized canoe fisheries amounted to N76,000.00 for gillnet fishery, N126,500.00 for beach seine net fishery and N143,500.00 for the operation of encircling nets.

As indicated by Anonuevo (1989), a large amount of the value of the capital assets was used for procuring the outboard engine and amounted to 38.0% for encircling net 43.0% for the beach seine net and 72.4% for the motorized gillnet fishery respectively. The operational or variable costs included costs of fuel and lubricants for operating the outboard engine as well as the costs of maintenance and repairs of the gear, canoe and outboard engine. Yearly costs of maintenance and repairs were based on information provided by experience data and documented reports from various sources including Engvall and Engstrom (1974) and Udolisa and Solarin (1985). They vary proportionately to the initial cost of the canoe, outboard engine or the gear types for the first year. The corresponding maintenance and repair costs were 10%, 15% and 10% of the initial costs of canoe, outboard engine and the gear/net respectively. The operational costs ranged between N15,996.25 for trap fishery and N198,600 for operating the encircling nets.

The labour cost was the monetary value of fish given to the fisherman. The share systems had been established by tradition and were used in the lagoon fishery. The cost of labour for the hired fisherman remained at 1/3^rd of the catch or revenue generated from fish sales. The same amount should serve as feeding allowance if the fisherman was self-employed. The cost of labour provided by the fisherman/crew per annum ranged between N11,520.00 for hand line fishery and N171,000.00 for operating the encircling nets (Table 2). The catch was priced/valued according to the fish species, size as well as quality which vary from one gear to the other. The average price of fish caught by gill nets, cast nets, traps, hand line, beach seine nets, cast nets and encircling nets was N75.00/kg. Shrimps were caught in abundance by the stow nets and sold for N175.00per kg. The lift net was highly selective for the crabs which sold for N55.00/kg and the long line caught mostly the economically important catfish which sold for N100.00/kg.

As shown in Table 2 the total annual revenue from fish sales i.e. annual catch(kg) multiplied by the average price of fresh fish per kg, was lowest at N34,560.00 for hand line fishery and highest at N513,000.00 for (fish shelter) encircling nets.

Correspondingly the profit margin, in the first year of operation i.e. total revenue minus both the capital and operational costs was N15,090.00 for hand line fishery shelters with the encircling nets with motorized canoe. The return on investment (ROI) which is the proportion of the profit or loss to the summation of capital and operational cost ranged between 45.70% for hand line fishery and 90.30% for operating the traps. As indicated in Table 2, gillnet canoe fishery recorded in the first year an initial loss of N72,482.50 or 56.10% ROI relative to the sum of capital and operational costs. Motorized beach seine canoe fishery recorded a deficit of N109,016.00 or 58.6% ROI. However the encircling nets used for the brush park fish shelters operated with motorized canoes recorded a profit margin of N170,900.00 or 50.0% ROI.

Table2:Estimates of annual production costs and revenues of small-scale fishery in Lagos Lagoon in 1994

The Lagos lagoon has a multi gear fishery that targets the multi fish and shellfish species which showed spatial distribution and seasonal variations due to salinity variations. The analysis of fishing operations consists of computing cost factors for motorized or non-motorized canoe fisheries. The difference between the average total cost and the average variable cost was greater for the motorized canoes. This was due to the added cost of motorization. The high cost of outboard engine affected the annual return on investment as compared with non –motorized canoe. The deployment of outboard motors substantially eliminated the drudgery associated with fishing. However the operational range and coverage of the fishing grounds remained essentially he same in he lagoon. This as in contrast to what obtained at sea which provided extended range and coverage for motorized canoe. Therefore it is advisable to use outboard engines with 8-15 horse power ratings which are relatively cheaper than 25-40Hp engines.

Cost of procuring fishing inputs especially outboard engine was astronomically high. Petrol and diesel, the two main sources of energy for operating the engine also recorded high prices.

The problem of high cost of outboard engine and other inputs is exacerbated by sporadic and unstable increase in the exchange rate of the Nigeria naira to the U.S. dollar as well as high rate of inflation.

Therefore the initial loss or deficit recorded in the first year of operation by the motorized gillnet or beach seine net fishery was due to the high capital investment or cost of outboard engine. However the deficit should be regained in subsequent years because the life span of the outboard engine could be up to 15 years with good maintenance.

According to Brainerd (1989) a fisherman has to cover the average variable costs in order to operate in the short run. It is also imperative to cover the average total costs in order to replace the equipment and operate in the long run. Traditional sources of finance for small-scale fishery were non institutional loans, obtained from informal thrift scheme locally called "Esusu" which did not accommodate any grace period and were usually repayable over a period of one year without any moratorium. Therefore it was mandatory to recoup the capital and also source the operational costs from the revenue generated within one year to be able to offset the loan.

The small-scale fishermen did not have access to regular lending market for a variety of reasons including lack of acceptable collateral and high interest rates. Ajayi and Tobor (1991) observed that seasonal variations in abundance of fisheries resources, bad weather and disruption of production resulted in income fluctuations for which reason banks refused to give loans to the small-scale fishermen.

We acknowledge with thanks the cooperation of the local fishermen who were actively involved in the fishing operations. We thank Dr. T. O. Ajayi the former Director, Dr. B. I. Ezenwa the Director and the management of the Nigerian Institute for Oceanography and Marine Research, Lagos for their support. The project was partially funded by the Commission of the European Union (ECU) in collaboration with the Federal Ministry of Economic Planning of Nigeria. The secretariat assistance provided by Mrs. C. A. Adeleye is gratefully acknowledged.