Ghana - Forestry sector review

Report No. 6817-GH Ghana Forestry Sector Review June 15, 1987 Western Africa Region FOR OFFICIAL USE ONLY Document of the World Bank This docui ient has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  GHANA FORESTRY SECTOR REVIEW CURRENCY EQUJIVALENTS #1.00 = US$0.006 US$1.00 = O15O WEIGHTS AND MEASURES Unless otherwise stated all weights and measures used in the report are metric. 1 metric ton 0.98 long ton 1 long ton = 2,240 lb. = 1.016 metric ton I hectare (ha) 2.47 acres I acre = 0.405 ha 1 kilometer (km) = 0.62 mile 1 mile = 1.609 km 1 cubic meter (mi3) = 35.30 cubic feet ABBREVIATIONS CIDA - Canadian International Development Agency FAO - Food and Agriculture Organization FC - Forestry Commission FD - Forestry Department FPIB - Forest Products Inspect'oon Bureau FPRI - Forest Products Research Institute COG - Government of Ghana GTMB - Ghana Timber Marketing Board GWD - Ghana Wildlife Department IITA - International Institute of Tropical Agriculture LC - Lands Commlssinn LD - Lands Department MLNR - Ministry of Lands and Natural Resources MOA - Ministry of Agriculture MRD - Ministry of Rural Development ODA - Overseas Development Administration PNDC - Provisional National Defense Council SFS - School of Forestry, Sunyani TEDB - Timber Export Development Board UST - University of Science and Technology WP - Working Paper  FOR OMCIAL USE ONLY GHANA FORESTRY SECTOR REVIEW Table of Cont9nts Page No. Preface iii Executive Summary iv I. THE SECTOR 1 A. Forest and Land Area 1 B. Population Growth and Land Pressure 2 C. Importance oc the Forest.y Sector 2 D. Industrial Forestry 2 Natur&l Forests 2 Forest Plantations 5 Annual Allowable Cut 5 Forest Fees and Revenue 7 E. Rural Forestry 8 Trees and Farming 8 Fuelwood Balance 9 Alternative Household Fuels 9 F. Forest Industries 10 Mechanical Wood Industries 11 Future Industrial Production 13 Pulp and Paper Industry 14 II. INSTITUTIONS 15 A. The Forestry Department (FD) 15 B. The Game and Wildlife Department (GWD) 15 C. Forestry Education and Training Institutions 16 D. Forest Products ReseE,ch Institute (FPRI) 17 E. The Foreetry Commissi.on (FC) 17 F. The Forest Products Inspection Bureau (FPIB) and 18 the Timber Export Development Board (TEDB) III. MAJOR ISSUES 18 A. Resource Depletion 18 B. Insufficient Forest Revenues 19 Fees on Industrial Forest Harvesting 19 Fuelwood Tax 23 C. Evaluation of Program Priorities 24 Industrial Forestry 24 Rural Forestry 24 Pulp and Paper 26 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Page No. IV. AN AGENDA FOR PUBLIC POLICY 26 A. Prospects 26 B. Role of Government 27 C. Core Programs 27 Forest Management 27 Rural Forestry 30 D. Associated Programs 33 E. Forest Industry 34 Appendix 1 - Forestry Sector Institutions Appendix 2 - Budget Estimate Core Programs Apipe.idix 3 - Budget Estimate Supplementing Programs List of Working Papers Volul.e I I - Role of Forestry and the Forest Industry Sector in Ghana 'I - The Forest Resource Base III - Forestry Sector Institutions IV - Forest Concessions v - Fees and Taxes on the Forestry and the Forest Industry Sector VI - Forest Policy and Forest Management VII - Forestry for Rural Development volume II VIII - Forest Industries IX - Forest Products Trade and Consumption X - Wildlife Management XI - Forestry Research XII - Forestry Education and Training Maps No. - IBRD 15116R2 IBRD 18469R1 IBRD 18475R1 IBRD 18470R1 IBRD 18472R IBRD 18393R1  - iii - GHANA FORESTRY SECTOR REVIEW PREFACE 1. The principal cbjective of the Ghana Forestry Sector Review Mission was to identify constraints to long-term sustained development in the forest and forest industry sector and to recommend measures which would help in overcoming such constraints. For this purpose a program strategy for the forestry sector (including wildlife) has been proposed in this report. The working papers give a more detailed description of the sector. 2. The review was carried out following a request by the Ghana Government and was undertaken as a multidonor sectoral review with the Bank es lead agency. Particilants were the British Overseas Development Administration (ODA), the Canadian International Development Agency (CIDA), and the Food and Agriculture Organization of the United Nations (FAO). The Mission liaised with the Tropical Forestry Action Plan Office of FAO. 3. The findings are the result of a field mission carried out in April 1986 in which participated H. Hvidberg-Hansen (Bank), W.J. Howard (ODA), M. Laverdiere (CIDA), A. Sene (FAO) and consultants B. Palmer (Bank), J. Gray (CIDA), R. Henriksen (CIDA), R.J. Palmer (ODA), T.P. Dodd (ODA). In Ghana, the Mission worked in close cooperation with the Ministry of Lands and Natural Resources (MLNR), the Forestry Department (PD), the Forestry Commission (FC) and with other government agencies. Ms. Bagai provided the secretarial support. 4. In January-February 1987 a combined World Bank, ODA and FAO mission discussed the report in Ghana with the MLNR, FD and -C. The report was accepted by the government and comments received have been incorporated in the present version.  - iv - GHANA FORESTRY SECTOR REVIEW Executive Summary The Sector 1. Contribution to the Economy. The forestry sector in Ghana is important for both economic and environmental reasons. The 1985 industrial log production was about 900,000 m9 representing a value of about US$22 million on stump. The value of industrial forest products was US$65 million of which US$30 million was foreign exchange. The value of fuelwood and poles used annually is equivalent to US$200 million. Forestry's and forest industry's share in GDP was 7 percent in 1985. 14,000 people were employed in the industrial sector and many more in the rural sector. In addition to wood products, trees provide a long range of benefits such as local medicines, edible fruit and leaves, and meat from wild animals contributes about 12 percent to the animal protein consumed by the human population. The maintenance of tree cover is important to maintain farm yields, avoid erosion of farmlands and siltation of dams, and is a necessity for a long term sustained agricultural production. 2. The Trend. Pressure on the resource is increasing. At the beginning of the t.entury practically all of the southern forest zone (8.2 million ha) was covered by closed forest. Since that time owing rainly to shifting cultivation the closed forest has been reduced to about 1.7 million ha. In addition to the impact of shifting cultivation, forest resources in Ghana have been harvested for industrial exports and domestic woodfuel. The annual industrial log production in the early 1970's was as high as 1.8 million mi. Due to the economic decline, logging deteriorated after 1980 but is again increasing, and in 1986 log production is estimated to be about 1.0 million mi. The Forest Zone and the northern savanna zone still hold considerable fuel and resources. However due to increasing demands for fuelwood, there are wide corridors of cleared areas along roads and open spaces around major settlements. In the intensively farmed areas in the Upper Eastern Region there are only few farm trees left for fuelwood and the same is the case in isolated areas of the north eaptern part of the Northern Region. In such areas, erosion is on the increase resulting in decreasing soil fertility and beginning desertification. The annual consumption of woodfuels is at present about 12 million mg and is forecast to reach 17 million u9 by the year 2000; this would exceed the annual volume increment by 3-4 million ms, and result in a negative fuelwood balance, accelerating the downward ecological trend. 3. Existing farming practices and demands for woodfuel have combined in reducing forest and farm tree resources. Increased demand for industrial roundwood, threatens the industrial forest within forest reserves (1.7 million ha), because the Forestry Department's (FD) control has deteriorated due to insufficient funding for transport and equipment and a decline in supervision and management.  - v - 4. Institutions. The Forestry Department manages the national forest estate and the forestry program. The Lands Department (LD) is responsible for forest concessions outside forest reserves and for collection of revenues from such areas. The Forestry Commission (FC) advises the Provisional National Defense Council (PNDC) and other government agencies on forestry matters. Forestry is taught at the Institute of Renewable Natural Resources (IRNR) and at technical level at the Sunyani Forestry School (SFS). The Forest Products Research Institute (FPRI) is responsible for all forestry research. The Forest Products Inspection Bureau (FPIB) obtains statistics on log production and ensures that exports conform with product value and standards. The Timber Export Development Board (TEDB) is responsible for export promotion. The Game and Wildlife Department (GWD) is responsible for national park and wildlife management. Proposed Programs 5. The major issues in the sector are the unmanaged depletion of the forest resource, the low level of fees on timber harvested, insufficient formulation of policies, and the urgent need to establish program priorities. 6. Core Programs. If the present trend of resource depletion is reversed, and the industrial forest brought under sustained yield management, it is estimated that the existing forest could produce 1.1 million m3 of industrial roundwood annually, worth about US$25 million on stump and resulting in a forest product value of about US$77 million. The potential government revenue from forest fees (stumpage fees) from the harvest of 1.1 million mg would exceed the cost of managing the resource by 78 percent (if the fees are raised as proposed in this report) and it is recommended that the Government of Ghana (GOG) gives immediate priority to bringing the industrial forest under sustained yield management so that the forest industry can be maintained. A forest management program with three components is proposed: (a) forest inventories and elaboration of management plans combined with better control of boundaries and forest management in 1.7 million ha of forest reserves; conservation of remaining virgin high forest; (b) rehabilitation of 52,000 ha of forest plantations; and (c) bringing 0.3 million ha of forest under sustained yield management through cooperation with local communities. 7. The decline in fuelwood availability is a serious threat to the economy in the long term, and it is recommended that the GOG gives high priority to addressing that problem. Because of the scale involved in maintaining fuelwood supplies locally and because of the ecological necessity of trees on farms, the rural population would need to be involved if tree planting and conservation is to be successful. This would suggest a rural forestry program, where fuelwood is grown by farmers for their own use and for sale, rather than being supplied by the government. The key to a successful agroforestry program is local involvement in its implementation. In addition to growing fuelwood, farmers, if given the right incentives, should be interested in preservation and regeneration of  - vi - timber trees, thus expanding the industrial resource base. The GOG should support such a program by making available seedlings, and extension 3ervice in management of woodlands, tree planting, and improved charcoal burning. It is also recommended that GOG encourage commercial tree plantations, by making available land, giving security of tenure and other possible incentive measures. 8. To implement the proposed core programs in forest management and rural forestry, it would be necessary to strengthen the FD's operational and monitoring capacity through regular funding, training programs and technical assistance. The core programs plus FD's regular funding would require an annual budget of about 01,000 million and should be accompanied by improvements in forestry research, education, wildlife and national park management. The ru ,iql forestry program would require coordination between government agencies and in particular between the FD and the MOA vhich would carry out the farm foresftry extension program. A lead agency should be established. At present agricultural staff do not receive training in agroforestry and the newly formed agroforestry unit in the MOA could play an important role by introducing agroforestry into the agricultural education at both university and technical level. 9. Support Programs. An applied research program in agroforestry, silviculture and forest products should have a higb priority if the forestry sector in Ghana is to make continued progress. The PPRI is presently not giving adequate attention to setting priorities and management of a research program. The work program and staff requirements should be reviewed and a list of research priorities established as part of a rehabilitation program under which the most necessary vehicles and equipment would be provided. Subsequent to the proposed rehabilitation, an agroforestry research program in conjunction with the rural forestry program is recommended. 10. FD's success in the management of forest reserves will depend on the adequate provision of well educated staff. The IRNR is functioning quite well but would benefit from more forestry specialization and inclusion of agroforestry in towe course program. In addition it needs more staffing and some basic equipment. 11. The GWD lacks senior staff, vehicles and equipment and is presently not in a position to adequately protect the national heritage of original fauna and flora in the protected areas. It is recommended that the department be rehabilitated. Policy Recommendations 12. The proposed programs would ensure a sustained yield of 1.1 million u3 of industrial roundwood and reverse the dcwnward ecological trend by managing the forest reserves and tree populations outside forest reserves. If successful the rural forestry program may also contribute to increased sustainable output of industrial wood and the annual allowable cut could be increased beyond the 1.1 million m3. Within the next five to  - vii - ten years, it is proposed to give priority to the proposed core - and support programs. This should be accompanied by a policy which would stimulate establishment of private industrial plantations. In the medium and longer term, when the GOG has come to grips with the most oressing problems, investments in additional government plantations could still be an attractive alternative for increasing the resource base. Investment in a pulp and papermill is less attractive than investing in the forest resource base and requires a high capital investment. The Government should refrain from such an investment. 13. The existing forest policy gives a broad mandate to FD and is very general. It would be useful to draw up a forestry action plan stipulating the strategy, targets and how to achieve them. It is recommended that the MLNR formulate such a forest policy and be strengthened so as to ensure better program coordination and monitoring of its departments. This would include better integration of forestry with wildlife management. 14. The proposed programs should be supported by appropriate policies in relation to pricing of wood, forest management and industrial development: 15. Forest Fees. The GOG should ensure that the right to harvest timber is taxed in a way that reflects the value of timber taken and is sufficient for renewal of the resource. The analysis carried out during the sector review indicates that the current forest fees would only capture about 9 percent of the estimated net stumpage value per ms of industrial timber harvested. Furthermore, changes in the relative fee rates would shift emphasis from area-based fees to fees charged per tree taken. This change in forest fee composition is undesirable because area- based fees are the easiest to administer and more difficult for concessionaires to evade. Furthermore one of the area-based fees, the silvicultural fee, would be diminished to about 2 percent of total potential forest fee assessment compared to previously 16 percent. As the proceeds from silvicultural fees are used for forest management, this is undesirable. It is recommended to raise forest fees upwards about four times. This would raise fee revenues (to about 41,300 million) for improved forest management and increase incentives for more efficient timber harvesting and utilization. Revision of fees requires PNDC approval and while such revision should be done frequently, possibly every third year, it is proposed that the MLNR should be authorized to index fees every six months based on changes in log prices. The Government should review the present distribution of forest fees and examine if the proportion of proceeds withheld at local level is uniform throughout the country and who should benefit from such funds. The FD needs better funding and it is recommended that a significant portion of forest fees be made available for forest management. 16. Fuelwood Tax. The forest fees described above, refer to industrial roundwood harvested in conc ssions. Fuelwood harvesting is not affected by these regulations and is mainly harvested outside of forest reserves. Fuelwood and charcoal are mainly produced by farming communities  - viii - who sell to commercial dealers and it is recommended under the rural forestry program to organize producer groups and authorize them to charge a tax to fuelvood dealers. Monies collected should be administered by the fuelwood producer groups for tree planting and for community development. 17. Land Tenure. The usufructuary rights of farmers to trees varies with local customs from one locality to the other. The GOG should promote a policy of giving user rights of trees to the farmer cultivating the land or to local communities when land is not under cultivation. 18. Forest Management. To avoid depletion of the forest until forest management plans can be brought into use, Ghana should revert to a 25-year felling cycle and to contrel girth limits strictly. Concessionaires should be obliged to carry out stock mapping and enumeration before annual logging plans for forest reserves are approved by PD. 19. Protected Forests. Remaining unlogged virgin forest should be protected. About 0.5 million ha of forest are under the so called protection working circle and are for topographical reasons not meant to be logged. However logging of such areas now frequently takes place. When management plans are prepared these areas should again be set aside for full protection and conservation, 20. Concessions. The present concession structure is a patchwork of small units too small for optimum forest management. To rationalize forest management it is proposed to form new optimum size concessions units within forest reserves, cancel remaining concession tenure and reallocate concessions based on tendering procedures. This should be a well planned and staged operation. Present concession holders could be paid compensation on a per hectare basis on a portion of proceeds from the sale of their previous concession. 21. Regulations on Fire. By better range management and bush burning practices, the number of fires can be reduced. The GOG should promote the establishment of fire regulations at regional and district levels. 22. Government-owned Industries. The Government should pursue its plans of obtaining private ownership participation in the state-owned mills. These generally have experienced management and cash flow problems and a strategy should be prepared to avoid future government investment in the forest industry and to obtain private participation in the existing government owned mills. 23. Control of Annual Allowable Cut. The proposed forest fee increases would have a positive impact on forest industries by encouraging a better utilization of the trees already felled and paid for and thereby recucing waste. They should lead to investments in replacement machinery which can achieve higher conversion rates and to better care in processing. Similarly they should stimulate interest in installation of value adding equipment such as drying kilns, treatment plants and woodworking machinery. Higher fees and better forest management as proposed may bowever not be  - ix - sufficient to keep harvesting within the prescribed annual allowable cut. In addition it may be helpful to control annual felling through regulation of log exports and industry's primary processing. The Forest Products Inspection Bureau's (FPIB) log export data should be monitored closely by the MLNR and if industrial processing in the country continues to be economical and expanding, the Government should consider either to extend the existing log export ban or to put stiff value added taxes on log exports. Industrial primary processing capacity is already above the allowable cut and it is recommended that all industries be registerAd and expansion of capacity only granted after application and in case it is justified. 24. Foreign Exchange Requirements. Much of the forest industry machinery is old and requires replacement to achieve improved recovery rates and efficiency. There is need for a current modernization of the industry as well as procurement of spare parts and investments in equipment to allow further processing. It is therefore important that the industry continues to have access to foreign exchange so as to allow the widest possible choice in procurement. 25. Improvements in Statistical Records. Statistical data on log production and product manufacture are insufficient and FPIB should request companies to report productlon.  GHANA FORESTRY SECTOR REVIEW I. THE SECTOR 1. In 1985 forestry and forest industries contributed 7 percent to GDP and $30 million to export receipts. Employment in the forest product industries was 14,000, 1/ with many others employed in the informal sector as wood gatherers, charcoal makers, suppliers of polea and building materials and craftsmen. Given proper policies and management, there is scope for increased employment and value added in the industrial forestry sector. Forests and farm trees also play a vital ecological role in Ghana in maintaing soil fertility and sustaining supplies of wildlife, fruit and local medicine. A. Forest and Land Area (Working Paper II) 2. Ghana covers an area of 23.9 million ha and is divided into two major vegetation tones, the high forest zone covering 8.2 million ha and the savanna zone covering 15.7 million ha. The modern sector forest industry is concentrated in the high forest zone, while informal sector exploitation occurs in both zones. 3. The high forest zone covers the central and southwestern parts of the country and is divided into (a) the moist evergreen forest (including the moist montane forest); (b) the moist semi-deciduous forest; and (c) the dry semi-deciduous forest. The increase in shifting cultivation caused by rapid population growth (2.51 between 1970 and 1984 in the forest zone), and probably exacerbated by the economic decline since the late 1970's (affecting the commercial and export sectors including cocoa), has transformed closed forests into open forests and fallowlands. The closed forest is presently estimated at 1.7 million ha - about the size of the reserved forest 2/ which covers 1.68 million ha or 20.4 percent of the forest zone. 4. The savanna zone covers parts of the Brong Ahafo and Volta Regions and includes the Northern and Upper Regions. The savanna zone is divided into four vegetation types: derived savanna, southern guinea, northern guinea and sudan savanna. The savanna forest covers an estimated 9 million ha (5b% of the zonal area) but cannot be distinguished easily from late fallow state. The reserved forest covers 5.6 percerr of the savanna zone. 1/ Enterprises employing more than 10 people. 2/ Reserved forest are aress used for permanent forestry production.  - 2 - B. Population Growth and Land Pressure (Working Paper VII) 5. In the forest zone, the 1984 population density varied between 30 people per km2 in Brong Ahafo and 117 people per km2 in the Central Region. When uninhabited forest reserve areas are excluded these figures increase to 32 and 140. With the progressive destruction of the forest by shifting agriculture, pressure from farmers to move into the reserved forest has increased. In the savanna zone, the high population density particularly in the Upper East Region (87 people per km2 in 1984), has resulted in pressure on the fuelwood resource and the ecology as a whole. Fuelwood shortages are most serious in areas such as in the North East and on the Accra-Tema plains where population pressure is combined with relatively low vegetative growth rates. 6. Because of emigration associated with the deteriorating economy, Ghana's annual population growth rate was relatively low during the period 1965-83 (2.2 percent). With economic resurgence and natural population expansion, however, it is expected to acelerate markedly to 3.5 percent from 1985-2000. More important, Ghana in the next 15 years 's projected to have the second highest growth rate among Sub-Saharan African countries in the agriculture labor force (3.8 percent). This has important consequences for forest management. Even in years of relatively low population growth, pressure on the land from shifting cultivation led to the disappearance of virgin forest by 1980. By 1985 27 percent of the former forest area had become forest fallow or degraded forest. Pressure on the land will increase through the year 2000. C. Importance of the Forestry Sector (Working Paper I) 7. The forest products industry earns foreign exchange for Ghana, produces most of the wood products consumed in the country (import substitution), and provides employment and government revenues in the form of various fees and taxes. Export earnings declined from a peak of US$91.4 million in 1976 to US$14.8 million in 1983. The 1976-1983 decline in official exports was partially offset up to 1980 by increased overland exports (smuggling), registered as domestic sales. As from 1980, the unavailability of spare parts caused a decline in apparent log production from an average of 1.6 million m3 between 1975-79 to an average of 772,000 ms between 1980 and 1984. In 1985 the production of industrial roundwood was about 927,500 mi, - 143,000 ms of which were exported as round logs (unprocessed logs). The balance (784,500 m3) was processed into lumber and other wood products in Ghana. Exports of wood products (including logs) rebounded to about US$30 million and the value of industrial wood products consumed in Ghana to about US$34 million. The value of fuelwood and poles from rural forestry in 1985 was about US$200 million. 8. Forestry's share (excluding manufacture) in total GDP in the decade before 1985 varied modestly between 4.6 percent and 6.2 percent annually. Even with strong and competent management it is unlikely to contribute more than between 6-10 percent on a consistent basis. To do so would imply an unacceptable longer run mining of the forest resource. This  - 3 - is apparently what occurred in the early 1970s when 19.5 percent of 1973 total exports was accounted for by forest products and the apparent log production averaged 1.8 million m3 annually, 64 percent above the estimated annual allowable cut of 1.1 million ms (defined as the sustainable felling volume). Forestry's share in GDP was in 1985 about 6 percent (excluding manufactut-z) and is expected to increase somewhat when production reaches the 1.1 million m3 allowable cut. Official exports are expected to increase from the 1985 level of US$30 million because of the increased production and a gradual shift from smuggling to recorded exports. However, it is unlikely that forest product exports would ever exceed US$70 million in 1985 constant prices if the annual allowable cut is not exceeded 9. The forest sector also has important though less quantifiable environmental benefits through its impact on crop yields and agricultural development. Although no one knows exactly what the mechanisms affecting the overall climate are, some think that the presence of a continuous belt of high forest has a stabilizing effect on the climate. Because it increases surface run off, widespread deforestation leads to lower soil moisture regimes, less recycling and declining rainfall. In the local environment, the ecological benefits from farm trees are mainly in reducing the wind speed (shelter) and the ability to recycle nutrients from deeper layers of the soil. The lowering of wind speed reduces wind erosion and physiological damage to crops resulting from high wind velocities and sand blow. Shade and shelter affect the micro climate resulting in higher soil moisture content. Using their deep roots, farm trees recycle nutrients from deeper layers of the soil and deposit them on the ground surface in the form of leaf litter, thus making plant nutrients available to annual crops with less penetrating root systems. The most important role of farm trees is the prevention of overall ecological degradatior which causes soil erosion and declining fertility and inevitably reduces arable land areas. Shel.er typically increases plant production by about 20 percent providing more crops and stover for human and animal consumption. Conservation of the forest habitat is important for the preservation of wildlife and plant species. Tress produce edible leaves, fruit and livestock fodder, and wildlife meat is important in the population's diet. D. Industrial Forestry (Working Papers II, IV, V and VI) Natural Forests 10. Log6 for the wood products industry are produced in the forest zone. They are extracted from forest reserves (1.68 million ha) and from the diminishing tree stocks in forests and farmlands outside the reserves. During 1970-74 log production averaged 1.85 million m9 per year but declined to 680,000 m3 during the low point in 1983. It is expected to reach about 1.0 million mg in 1986, which is close to the annual allowable cut of 1.1 million m3. 11. In Ghana there are two types of cutting rights. Cutting rights to the high forest are allocated through concessions (timber leases), wh.ile timber licenses are short-term harvesting rights intended for salvage  - 4 - logging and are of minor importance. Concessions (4.08 million ha) cover practically all forested land, including the forest reserves and 2.4 million ha outside of the reserves. Although concessions initially were very large and granted to a few companies, they have gradually fragmented (median size 3,900 ha; mean size 6,680 ha) and have more frequently been allocated to small loggers not involved in the manufacturing of forest products. There are still however, 10 concessions in the 38,000 - 52,000 ha bracket and 92 out of 366 concessionaires hold more than one concession. Nearly half of the concessionaires have holdings of between 1,300 ha and 5,200 ha, but the large state-owned forest industries still hold large concession areas. Many concessions are too small to sustain year-round logging operation, and are not ideally situated in relation to the processors. This results in wasteful exploitation of the forest resources. The small size (below 10,000 ha) is a disincentive to developing professional logging companiea prepared to make adequate investments, and limits the scope for rational management of forest reserves. Outside forest reserves, there is no policy of sustained yield management. The general presumption is that after logging most of the high forest will be converted to farmlands. 12. Concession Management in forest reserves involves three important components: (a) management of the forest itself to achieve a sustained yield, (b) supervision and control of concessionaires' logging operations, and (c) assessment and collection of revenues. 13. Natural forest management is ideally controlled by the following instruments: (a) the felling cycle, which is the period between logging an area of the concession and re-entry to the area for the next felling; (b) felling plans, designating areas to be cut each year based on a forest management plan; (c) enumeration of areas to be logged and establishment of the yield to be harvested; and (d) minimum girth limits of trees to be cut. 14. All of these principles of sound forest management are in place in Ghana but are not being fully implemented. Although the principle of sustained yield management prevails in theory, measures to enforce it are not -ken. Felling plans are rarely based on a forest management plan and the volume cut is not based on yield calculations. The felling cycle and the minimum girth limits are, therefore, the only tools available for managing the forest until the Forestry Department prepares management plans and allocates annual felling volumes based on yield calculations. 15. The forest reserves in general have adequate infrastructure with a compartment grid (1 x i sq. mile) and logging roads. Tho:re is, then a basis on which to build a sound management system based on ezstained yield. This requires management plans based on an inventory of standing volume  - 5 - combined witn knowledge of increment, and control of logging operations. The British Overseas Development Administration (ODA) is assisting Ghana with inventory work and planning. Improved control of logging requires enumeration of compartments prior to logging and preparation of stock maps, as still done by some large concessionaires. Although there is still a policy of stock mapping, it is now mainly done by some large concessionaires. FD's lack of mobility has resulted in inadequate forest management, concession control and revenue assessment. Forest Plantations 16. In addition to sound management of natural forests, most countries undertake plantation development as part of their forest management strategies. In the 1960s a major plantation program of 590,000 ha was planned mainly for the high forest and the transition zone between the high forest and savanna. In the period 1968-1977 about 40,000 ha were planted with peak annual targets of 5,000 ha per year. Since the late 1970s, the planting program has been reduced gradually to its present level of about 1000-2000 ha per annum because of budgetary constraints and a renewed interest in natural forest management. 17. It is difficult to obtain accurate data on plantations because official records tend to report areas planted rather than areas successfully established. With increasing resource constraints, quality control in plantation establishment deteriorated and failures were frequent. In additiQn, inadequate weeding and fire maintenance has resulted in losses. Based on FD data, there is a total plantation area of 76,000 ha 3/. 52,000 ha are for the production of saw timber while the remaining 24,000 ha are woodlots and plantations in the savanna zone. Stocking is unknown, net areas could be lower. Annual Allowable Cut 18. The annual allowable cut is the industrial log volume that can be harvested annually on a sustained yield basis. Thus, the annual volume felled should not exceed the annual volume increment. The national allowable cut should be calculated by adding the felling volumes planned for the various foreBt areas as calculated in their fore&. management plans. But since management plans are not up to date, the national allowable cut will have to be based on "global" estimates of forest areas and volume increments. 3/ Silviconsult Ltd., 1985: The Forest Department Review and the Requirements of the Forest Products Inspection Bureau and the Timber Export Development Board (Draft Report), Silviconsult, Bj irred, Sweden, September 1985.  - 6 - 19. Forest volume increment is derived from three sources: (a) the natural forest in forest reserves, (b) the natural forest outside reserves, and (c) forest plantations. Estimates of the annual allowable cut from the natural forests are complicated by uncertainties as to the extent of forest areas and by the heterogenous nature of the tropical forests. The latter factor has two implications: (a) it is not well known what effect the harvesting will have on the long-term species composition in the forest, and (b) not all species are marketable and can be included in the allowable cut. 20. For the forest reserves, FAO during 1980-82 carried out inventory in 12 forest reserves (WP II). Silviconsult (1985) used this data for estimating increments and standing volumes for the total productive forest reserve area (WP II). Species were grouped into three major categories A, B and C. Group A comprises 40 species presently considered commercial; group B comprises 20 species which are potentially commercial but are presently harvested only to supply specific orders. Group C contains the remaining species that grow to a utilizable size. The total volume of group A species was estimated at 58.2 million m3 and the volume above prescribed girth limits at 29.4 million mi3. The increment and allowable annual cut were estimated as indicated: Annual Increment and Annual Allowable Cut from igh Forests within Forest Reserves PER HECTARE FOR FOREST RESERVES Total Annual Annual Allowable Total Allowable Increment Cut Increment Cut (m3/ha/yr) (million m3/yr) Species Group Group A Species 0.866 0.608 1.024 0.719 Group B Species 0.466 0.326 0.551 0.385 Note: Allowable cut estimated at 70% of increment. Per ha figures combined with 1.18 million ha in production working circle. Source: Silviconsult (1985), "The Forest Department Review," pp. 10-13. 21. For the areas outside forest reserves, the situation is more complex. No policy exists to maintain these forests or to manage them on a sustained yield basis. Perhaps then, volume harvested should not be  - 7 - included in the allowable sustainable cut. Such areas, however, would contribute to the annual harvest for at least the next 10-15 years even if they are gradually mined for their timber and, therefore, need to be included in the estimate. Although mining is likely to take place in some areas, it is recommended that the GOG bring additional forest areas under sustained yield management and also promote the regeneration of trees on farmlands. The forest outside reserves covers about 0.3 million ha (forest reserve equivalent). The annual allowable cut from this source has been estimated at 0.12 million m9 (group A species) per year on a pro rata basis assuming the same increment on the 0.3 million ha as in forest reserves. 22. Forest plantations are presently not managed on a systematic basis although some thinning for poles occurs. With improved management, this resource has potential for both domestic and export markets. The annual increment on teak is estimated at 157,000 m9 and that of other species at 103,000 m9, totalling 260,000 m9. 23. The national annual allowable cut is estimated as follows: irest in reserves (based on group A Species) 0.72 million m3 HiL 3rest outside reserves (" " ") 0.12 " o Timber plantations 0.26 " i Total 1.10 million in In order to maintain an annual allowable cut of 1.1 million m3 beyond the year 2000, the management of all three sources must be improved. Furthermore, the marketing of group B and C species should be increased as the number of class A species may diminish due to changes in natural regeneration patterns. Forest Fees and Revenue 24. Forest fees are important as a means of generating revenue for forest management and establishing incentives for environmentally sound use of forests. As far as the modern sector is concerned, the purpose of forest fees is to allow the government to collect as wide a margin as possible in rent from leasing the forest resource to the concessionaire, while ensuring that the rent collected is not so high that it inhibits industry profit and modernization. Forest fees in Ghana are of three types: (a) concession lease - an area charge levied annually, based on the area of the concession; (b) silvicultural fee - an area charge levied on the area logged each year; and (c) royalty - a stumpage fee levied per tree at rates which vary by species. 25. Concession lease fees were set at 02.0 per ha in 1983. A 1985 FD proposal to raise the fee to 010.0 per ha was not approved. At J2.0 per ha annual fees would amount to