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FORESTRY IN UGANDA: THE ROLE OF THE PRIVATE
SECTOR
By Celia Nalwadda
The European Environment Agency defines plantation
forestry as the establishment by planting and/or seeding of trees
in the process of afforestation or reforestation. Trees are
typically grown and managed as even-aged monoculture stands at
regular spacing over a large area for timber or pole production.
The private sector is defined as that part of a nation’s economy
that is not controlled by the Government: households, civil
societies and donor agencies.
There are 5 million hectares of forest land in
Uganda, of which less than 1% is plantation yet, interestingly,
Uganda has excellent conditions for developing the forestry
resource for commercial use. Most of the land in the country is
suitable for tree plantations, is well watered with an annual
rainfall range of 750-2000mm, we have a rich labour resource base
and an increasing demand for forest products. Despite all this,
Uganda is currently in a near crisis situation with regards to
even being able to meet the domestic market demand for
general-purpose timber.
The existing plantation were established by the
Government the late 1970’s and early 1980’s, with about 13, 000 ha
of mainly Pinus caribaea var. hondurensis and to a
lesser extent P. patula, P. oocarpa and
Eucalyptus grandis. These plantations have been harvested
since 1995 and the 2,000 ha or so left are in poor state and over
mature. There has been no plantation establishment for the last
the past 30 years with the result that there are currently 4,000
ha of plantations below 15 years of age, most having been
established since 2001. The Government through the National
Forestry Authority (NFA) planted 1,000 in 2004 / 2005 and is
aiming for 1,200ha in 2005/2006.
The private sector was, until recently, not
actively involved in plantation forestry.
A few private woodlots are scattered all over the
country, some funded through NORAD’s Peri-Urban Scheme. Some tea
and tobacco processing companies (e.g. James Finlay and British
American Tobacco) have also established private plantations to
meet their own fuel demands. The private sector, however, only
seriously started planting in 2003, stimulated by the Sawlog
Production Grant Scheme (SPGS) - funded by the European Union
(EU), which provides planting grants and technical advice.
Over 3,000 ha have been established to date under
the SPGS programme and it is well on track to achieve the 5,000 ha
target by 2007. The private sector is currently planting on its
own land and also on Central Forestry Reserves leased from the
National Forest Autority (NFA). However, this is not enough to
meet the country’s projected timber demand which will exceed 1
million m3
of round wood by 2025. It is estimated that at least 60,000 ha of
plantations will be required to meet this target. This projected
timber demand can only be met if the efforts of the NFA are
complimented by those of the private sector – including:
-
Direct establishment of forest plantations.
-
Establishment of tree nurseries to supply
seedlings for commercial purposes.
-
Private companies can assist small scale growers
through outgrower schemes.
-
Financial institutions can create especially
designed credit schemes to meet the unique economic
circumstances of private plantation companies. The EU through
SPGS programme is already doing this, but other institutions
like African Development Bank and the World Bank could come on
board as well.
-
Private Universities and Technical Colleges can
offer specialised training to forestry officers in plantation
establishment and management.
-
Developments in the field of biotechnology
elsewhere can be transferred to Uganda by the private sector.
One company is already in the business of promoting fast growing
Eucalyptus species for electricity poles production.
Although Uganda is making a great effort to lure
private sector investment in plantation forestry, several
constraints still prevail. There are many characteristics of
plantation investment that strongly influence investors making
decisions: the most obvious is the long term nature of growing
trees, with a very high proportion of expenditure in the early
phase and most of the revenue coming in at the end of the rotation
(which can be from 10 to 25 years depending on the species and
production objectives). This long gestation period adds greatly
to the uncertainty and risk of plantation investment. The
situation is not made better by:
-
Unrealistic pricing systems that undervalue timber as used until
the recent past.
-
Lack
of experienced plantation managers in Uganda.
-
Poor
quality of seed and planting stock for plantation forestry.
-
Lack
of appropriate information.
-
Technological advancements elsewhere are not being introduced.
-
Lack
of transparency in offering land permits.
-
Market
disincentives for investment.
These uncertainties and constraints give ample
cause to investors to shy away from the plantation sector despite
the apparent advantage of investing in plantations (e.g. expected
increase in demand for wood products, diversification of
investment portfolios, assuring long term supply for down-stream
industries and potential profits in the long run). Thus there
remain regular calls for assistance in the private sector to
enable it play a prominent role in plantation forestry.
The Government of Uganda has proved equal to the
task by taking bold steps to encourage private sector investment.
Just as good site preparation is important for enhancing tree
growth, so too is preparing a favourable policy and administrative
foundation for supporting successful plantation development. The
Government has done this by:
-
Establishment of good governance by enforcing the
rule of law and order in Uganda. This encourages private sector
by reducing the risk of investment.
-
Building infrastructure like transport and
communication facilities.
-
Liberalisation of the economy by pursuing
policies aimed at promoting the growth of market-based economy
with less central government involvement.
-
Restructuring of the forest sector through
formation of the NFA. This has helped to coordinate efforts
aimed at plantation development.
-
Streamlining issues of land ownership through the
constitution of 1995 and the land act of 1997: this clearly
defined land as public and private, successfully overcoming
ownership disputes and providing security for investors.
-
Formulation of complementary and enabling
policies and action plans that promote the involvement of the
private sector in plantation management. These include: the
national forest policy, poverty eradication action plan, and
plan for modernisation of agriculture and poverty action fund
among others. This approach proved successful in Thailand where
the reforestation act of 1992 was specifically designed to
encourage the private sector to develop forest plantations. As a
result of it, between 1986 and 1997, the area planted with
Eucalyptus increased from 553,000ha to over 4 million ha
(Brown et. al, 2003).
-
Signing and ratifying global conventions like the
Kyoto protocol of 1997, which support plantation establishment.
Although the above efforts are commendable, much
more still needs to be done. The Government can offer tax breaks
and physical incentives such as seedlings to private plantation
companies and there is still a need to move away from over
emphasizing the conservation and environmental functions of
forestry at the expense of productive ones. It is also essential
that economic models for all major types of forest plantations be
developed and the information be transferred to the private sector
regarding the profitability of investing in plantations and the
availability of funding mechanism. Commercial plantation
development must also be supported by a focused research and
development program with the key issue as supply of improved seed
and seedlings/clones.
In conclusion, the private sector is playing a
pivotal role in commercial forest plantations in Uganda. The
continuity of this trend will depend on the availability of
affordable funding for new plantation projects and security of
land tenure, among other factors already mentioned.
For further information:
Brown, C.L. & Durst, P.B. 2003. State of forestry
in Asia and the Pacific. RAP publication 2003/22. Bangkok, Food &
Agricultural Organisation of the United Nations.
Carle, J., Vourinen, P. & Del Lungo, A. 2002.
Status and trends in global forest plantation development. Forest
Product Journal. 52 (7/8): 12-23.
FOSA Country report- Uganda.
http://www.fao.org.//docrep/004/act427e.htm
NFA website.
www.nfa.org.ug/plantation
SPGS website:
www.sawlog.ug
NORAD 1999: Review of the forestry sector in
Uganda. Kampala, Uganda.
Uganda Investment Authority 1998: A guide to
investing in Uganda
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