The water quality and ecosystem productivity of a tropical lake in Ethiopia (Lake Arkiet) was evaluated using phytoplankton and environmental factors. This was to ascertaining the lake’s potential for various applications. Phytoplankton communities and some selected environmental variables were collected from two predefined sampling sites (open water and littoral) using a seasonal campaign between March to May (dry season) and June to August (wet season) in 2022. The analysis of the physicochemical characteristics of this study showed that the lake’s water was well-oxygenated (6.8–16.7 mg/L), warm (25.8–29.8 °C), turbid (154–317 NTU), had poor water transparency (4.3–16.1 cm), and was alkaline (pH = 7.29–11.31). The concentrations of inorganic nutrients (phosphate and nitrate) were notably high, ranging from 2.12–5.26 and 2.19–10.64 mg/L, respectively. A total of 34 phytoplankton taxa from four divisions were identified in Lake Arekit. Bacillariophyceae (18 taxa) and Chlorophyceae (10 taxa) were the major groups of phytoplankton which together represented the largest (82%) phytoplankton taxa. The total biovolume of phytoplankton in the lake was to be 384.15 mm3/L. Cyanobacteria contributed the largest (41%) phytoplankton biovolume followed by Bacillariophyta (32%). The highest biovolume (about 75%) was constituted in the Microcystis aeruginosa, Cylindrospermopsis raphidiopsis, Anabaena spiroides, Pediastrum duplex, Aulacoseira granulate, Navicula schroeteri, and Nitzschia palea. The distribution of environmental factors and phytoplankton communities showed greater seasonality. High phytoplankton biovolume was observed in the dry season at both sampling sites concurrently with high water transparency and low water temperature. Findings from this study revealed that Lake Arkeit was a moderately polluted but productive lacustrine ecosystem that can still support aquatic life, fish production, irrigation, and aquaculture. The primary source of the pollution is the entry of inorganic and organic wastes from a brewery and other water bottling industries nearby and around the lake, as well as possible excessive nutrient levels due to the lake’s geological background. It is advised that commercial factories stop producing or releasing waste in open spaces that are heavily washed and enter the lake via flooding and tributary rivers and streams. Additionally, the local government should work with the nearby communities to set up a buffer zone where people are prohibited from engaging in agricultural activities to protect and reduce pollution, which will help to preserve the lake’s water and ecosystem.
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