‘FORESTRY OPPORTUNITIES FOR GROWTH AND ECONOMIC DEVELOPMENT: THE ADB EXPERIENCE’ S.Z. MOUSSA Manager, Natural Resource and Environment Division, OSAN.3, African Development Bank

Africa in the Global Forestry Interplay Introduction: Africa’s forest and woodland of 1,339 million hectares (ha), constitutes 26% of the world’s total;Africa’s forest and woodland of 1,339 million hectares (ha), constitutes 26% of the world’s total; increasing pressure has led to high deforestation; loss of soil fertility, increased soil erosion, water depletion, soil and water pollution loss of biodiversity etc;increasing pressure has led to high deforestation; loss of soil fertility, increased soil erosion, water depletion, soil and water pollution loss of biodiversity etc; cautious use of Africa’s forestry resources has become more imperative because climate change phenomenoncautious use of Africa’s forestry resources has become more imperative because climate change phenomenon

Constraints and emerging opportunities for Natural Forest Management and Investments  A number of policy constraints impede a majority of African countries to implement sustainable forest management practices; –the low government priority assigned to the forestry sector as seen from the low and insufficient budgetary allocations provided to the sector; –weak/non existing forestry institutions and policies; –poor enforcement of regulations; –lack of incentives, in particular to local communities and the private sector; –wrong or lack of government intervention in failing markets; and macroeconomic policy failure including: –ill-defined property rights; poor resource pricing; exclusion of externalities in forest valuation; –high transaction costs in forest resource management and utilization; the treatment of forest resources as public goods; –uncompetitive markets; and uncertainty and risk aversion as these relate to investment in the sector

How does the Bank come in?  The Bank remains one of the major investors in the forestry sub sector;  The Bank’s Forestry Portfolio as of 31 December 2006 is composed of 12 projects with a commitment value of UA million;  forestry projects accounted for 5% of the Bank’s agricultural portfolio in volume and 8% in value;  The Bank has to date financed a total of 31 forestry projects in 21 countries at a total commitment value of UA million.

The Bank and the Forestry sub sector continued  The projects comprised of industrial wood plantations, natural resource conservation, rehabilitation of degraded indigenous forests, agro-forestry and institutional capacity building of institutions related to forestry and environment;

Performance of the sub sector  The assessment of performance of the Bank forestry portfolio is based on five factors namely: 1)comparison with other donors; 2)regional differences; 3)evaluation of constraints in project design and implementation; 4)evaluation of project impact; 5)and evaluation of project sustainability.

Performance of the sub sector contd The Bank has the longest project cycle from loan effectiveness to project completion compared to WB and IADB (Soluziona, 2005). Whereas the Bank average cycle is 7.4 years, IADB’s is 4.0 years while WB’s is 3.5 years;The Bank has the longest project cycle from loan effectiveness to project completion compared to WB and IADB (Soluziona, 2005). Whereas the Bank average cycle is 7.4 years, IADB’s is 4.0 years while WB’s is 3.5 years; The Bank has the longest period of 450 days from Board approval of loan to effectiveness while IADB had 352 days and WB 198 days respectivelyThe Bank has the longest period of 450 days from Board approval of loan to effectiveness while IADB had 352 days and WB 198 days respectively

Distribution of projects across the region The ongoing forestry projects are distributed in three regions: Eastern Africa (Kenya and Uganda); Central Africa (Burundi, Cameroon and Rwanda); and Western Africa (Benin, Burkina Faso, Ghana and;The ongoing forestry projects are distributed in three regions: Eastern Africa (Kenya and Uganda); Central Africa (Burundi, Cameroon and Rwanda); and Western Africa (Benin, Burkina Faso, Ghana and; The Eastern Africa has the largest share of 48% of the total portfolio in value, followed by the Western Africa which accounts for 37%. The Central Africa accounts for only 15% of the portfolio;The Eastern Africa has the largest share of 48% of the total portfolio in value, followed by the Western Africa which accounts for 37%. The Central Africa accounts for only 15% of the portfolio;

Distribution of Current Bank Financed Forestry Projects by Country. (% Commitment Value in Million UA)

Public Private Partnership in Forestry  The sustainable management of the forestry resources in Africa requires the cooperation and collaboration of all major key players / stakeholders. i.e. need for strategic partnership involving ;  From the public perspective, the Government would be required to provide the enabling environment that would ensure the judicious use of the forest resources in regenerative manner. This will involve the setting the policy and regulatory frameworks and enforcing the compliance.;  The issuing of licenses for the harvesting of forest should be strictly based on the concept of the minimum allowable cut and not for political patronage.  Furthermore Government of Africa should begin to explore then possibility of participating in carbon trade with the industrialized countries through the forest conservation mechanism.

Public -Private -Partnership  5.2 COMMUNITITIES :  The management and policing of forest resources should involve the communities where the forests are located. The royalties and taxes collected by Government from the exploitation of forest resources should have shared arrangement with a proportion allocated to the neighboring forest communities.;  The funds for the communities should be used strictly for the community development needs of such communities (as set up in their priorities jointly expressed by them) and should be managed by the recognizable community trustees who will be accountable to the entire community forum.;  The community assembly would have the power to fire any member of the trustees not acting in the best interest of the society. The forest communities would be willing to do more policing against illegal feelers when they are sure that they can share part of the benefits emanating from the forest. In other words Government should share part of the revenue with the communities who will in turn be prepared to utilize part of the shared funds for the regeneration of the forests.

PPP contd.  ORGANISED PRIVATE SECTOR  The industrial timber dealers should also be sensitize into not only meeting the monetary obligations but also to begin to se the investment opportunities for the regeneration of the forest resources. To this end Government should encourage the private sector to get involved in industrial tree planting especially by giving incentives in terms of land allocation for the private sector participants who are wiling to have industrial plantations for some common economic trees. More importantly the research institutes should be willing to provide assistance for the economic trees that have lower gestation periods.  For this partnership to evolve there is the strong need to develop a Forestry Management Plans for the major forest reserves zones in African countries. Such plans would specify the roles and benefits of each user of the forest resources.

Bank’s Role Bank’s Role  The Bank on its own would be wiling to assist Government to develop these management plans and the regulatory frameworks. The Bank will also be wiling to support reach efforts that would lead to scientific breakthroughs in the evolution of trees with lower gestation period. The Bank would also be at the vanguard of the promotion of use of alternative non timber products for the rural energy supply especially us bio-fuel as follow up on its promotion of Clean Energy Development

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