This article outlines the development of commercial open- water algae farming in Zanzibar in a historic context, with special reference to actual events at the corporate level from the initiation of algae-farming to its present state. These events, which contain policies and intentions of implementation at the producer level, have an array of social implications for the algae-farming communities. The three aspects of these implications are delineated; (i) a changing mode of tenure rights of the farmed lagoon areas; (ii) a changing role for algae farmers, i.e. women; (iii) a qualitative change within the composition of indigenous productive activities, the latter being illustrated by a de- clining activity in agriculture. The article demonstrates the importance of the encounter between an indigenous liveli- hood system and infused incentives pertaining to divergent rationales of livelihood in socioeconomic development processes.