Forestry in Ghana
Encyclopedia
Forests cover about one-third of Ghana
's total area, with commercial forestry concentrated in the southern parts of the country. This sector accounted for 4.2 percent of GDP in 1990; timber
was the country's third largest foreign exchange earner. Since 1983 forestry has benefited from more than US$120 million in aid and commercial credits and has undergone substantial changes, resulting in doubled earnings between 1985 and 1990. In 1993 timber and wood products earnings totaled US$140 million against a targeted level of US$130 million. Between January and November 1994, exports amounted to 919,000 tons and earned US$212 million.
Until the 1980s, forestry production suffered because of the overvalued cedi and deterioration of the transportation infrastructure. Log production declined by 66 percent during 1970- 81 and sawed timber by 47 percent. Exports fell from US$130 million in 1973 to US$15 million in 1983, and four nationalized firms went bankrupt during that period.
The forestry sector was given a large boost in 1986, mainly because of the World Bank
's US$24 million timber rehabilitation credit, which financed imports of logging equipment. As a consequence, log production rose 65 percent in 1984-87, and export revenues rose 665 percent in 1983-88. Furthermore, the old Ghana Timber Marketing Board was disbanded and replaced by two bodies, the Timber Export Development Board—responsible for marketing and pricing, and the Forest Products Inspection Bureau—responsible for monitoring contracts, maintaining quality standards, grading products, and acting as a watchdog for illegal transactions. Some of the external financing underwrote these institutional changes, while much of the rest financed forestry management and research as well as equipment for logging, saw milling, and manufacturing.
The sector, however, faced several problems. The most important was severe deforestation
. A century ago, Ghana's tropical hardwood forest extended from about the middle of the country southward to the sea. Moreover, nearly half the country was covered with forests, which included 680 species of trees and several varieties of mahoganies. Most of this wood has been cut. By the early 1990s, only about one-third of the country was still forested, and not all of this was of commercial value. This situation has forced the government to make difficult choices between desperately needed hard currency earnings and conservation. The Forest Resource Management Project, part of the ERP
, was initiated in 1988, and in 1989 the government banned log exports of eighteen species. The government later extended the list and imposed high duties on other species, planning to phase out log and air-dried timber exports altogether by 1994.
Instead, the government hoped to increase sales of wood products to replace earnings from logs. Government figures showed that one cubic meter of lumber
and plywood
was worth more than twice as much as the same amount of logs; veneers
earned five times as much; and other products, such as furniture and floorings, earned six times the price of an equivalent volume of logs. Improvements in the processing sector caused wood products (excluding lumber) to rise to about 20 percent of export earnings in 1991, accounting for 6.9 percent of volume exports. By comparison, wood products represented 11 percent of earnings and 5.5 percent of volume in 1985. The fall in the proportion of volume sales accounted for by logs was accompanied by a dramatic fall in their share in earnings, from 50-60 percent in the mid-1980s to 23 percent in 1990.
By the early 1990s, there were approximately 220 lumber processors in Ghana, but the industry operated under several constraints. Most overseas demand is for kiln
-dried products, and Ghanaian manufacturers lack sufficient kilns to meet that demand. The cheap air-dried processing method is not satisfactory because air-dried wood tends to destabilize over time. Foreign investment incentives are not so attractive in this sector as in others, for example, mining
. Furthermore, infrastructure in the Western Region where lumber processing is located continues to be relatively neglected compared with mining and cocoa production regions. Other difficulties include lack of expertise at technological and managerial levels. Scandals have been reported in Ghana's forestry industry since 1986, and they erupted again in early 1992. The most notable case involved African Timber and Plywood, once Ghana's largest exporter of round logs. In the mid-1980s, the government embarked on a US$36 million rehabilitation project to boost the company's production. In 1992 as much as US$2.3 million was alleged to have been siphoned off from the project through various malpractices, and a number of officials were arrested. Furthermore, the environmental group, Friends of the Earth
, alleged that there had been additional thefts by numerous foreign companies totaling almost US$50 million in hard currency during the 1980s. In 1992 the government began investigating the activities of hundreds of companies, both foreign and local, that were alleged to have entered into a range of illegal dealings including smuggling
, fraudulent invoicing, violation of local currency regulations, corruption, bribery
, and nonpayment of royalties
. The corruption is so wide spread, however, that it is unlikely that the Ghanaian authorities will stop timber-related crimes anytime soon.
Ghana
Ghana , officially the Republic of Ghana, is a country located in West Africa. It is bordered by Côte d'Ivoire to the west, Burkina Faso to the north, Togo to the east, and the Gulf of Guinea to the south...
's total area, with commercial forestry concentrated in the southern parts of the country. This sector accounted for 4.2 percent of GDP in 1990; timber
Timber
Timber may refer to:* Timber, a term common in the United Kingdom and Australia for wood materials * Timber, Oregon, an unincorporated community in the U.S...
was the country's third largest foreign exchange earner. Since 1983 forestry has benefited from more than US$120 million in aid and commercial credits and has undergone substantial changes, resulting in doubled earnings between 1985 and 1990. In 1993 timber and wood products earnings totaled US$140 million against a targeted level of US$130 million. Between January and November 1994, exports amounted to 919,000 tons and earned US$212 million.
Until the 1980s, forestry production suffered because of the overvalued cedi and deterioration of the transportation infrastructure. Log production declined by 66 percent during 1970- 81 and sawed timber by 47 percent. Exports fell from US$130 million in 1973 to US$15 million in 1983, and four nationalized firms went bankrupt during that period.
The forestry sector was given a large boost in 1986, mainly because of the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
's US$24 million timber rehabilitation credit, which financed imports of logging equipment. As a consequence, log production rose 65 percent in 1984-87, and export revenues rose 665 percent in 1983-88. Furthermore, the old Ghana Timber Marketing Board was disbanded and replaced by two bodies, the Timber Export Development Board—responsible for marketing and pricing, and the Forest Products Inspection Bureau—responsible for monitoring contracts, maintaining quality standards, grading products, and acting as a watchdog for illegal transactions. Some of the external financing underwrote these institutional changes, while much of the rest financed forestry management and research as well as equipment for logging, saw milling, and manufacturing.
The sector, however, faced several problems. The most important was severe deforestation
Deforestation
Deforestation is the removal of a forest or stand of trees where the land is thereafter converted to a nonforest use. Examples of deforestation include conversion of forestland to farms, ranches, or urban use....
. A century ago, Ghana's tropical hardwood forest extended from about the middle of the country southward to the sea. Moreover, nearly half the country was covered with forests, which included 680 species of trees and several varieties of mahoganies. Most of this wood has been cut. By the early 1990s, only about one-third of the country was still forested, and not all of this was of commercial value. This situation has forced the government to make difficult choices between desperately needed hard currency earnings and conservation. The Forest Resource Management Project, part of the ERP
Enterprise resource planning
Enterprise resource planning systems integrate internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application...
, was initiated in 1988, and in 1989 the government banned log exports of eighteen species. The government later extended the list and imposed high duties on other species, planning to phase out log and air-dried timber exports altogether by 1994.
Instead, the government hoped to increase sales of wood products to replace earnings from logs. Government figures showed that one cubic meter of lumber
Lumber
Lumber or timber is wood in any of its stages from felling through readiness for use as structural material for construction, or wood pulp for paper production....
and plywood
Plywood
Plywood is a type of manufactured timber made from thin sheets of wood veneer. It is one of the most widely used wood products. It is flexible, inexpensive, workable, re-usable, and can usually be locally manufactured...
was worth more than twice as much as the same amount of logs; veneers
Wood veneer
In woodworking, veneer refers to thin slices of wood, usually thinner than 3 mm , that are typically glued onto core panels to produce flat panels such as doors, tops and panels for cabinets, parquet floors and parts of furniture. They are also used in marquetry...
earned five times as much; and other products, such as furniture and floorings, earned six times the price of an equivalent volume of logs. Improvements in the processing sector caused wood products (excluding lumber) to rise to about 20 percent of export earnings in 1991, accounting for 6.9 percent of volume exports. By comparison, wood products represented 11 percent of earnings and 5.5 percent of volume in 1985. The fall in the proportion of volume sales accounted for by logs was accompanied by a dramatic fall in their share in earnings, from 50-60 percent in the mid-1980s to 23 percent in 1990.
By the early 1990s, there were approximately 220 lumber processors in Ghana, but the industry operated under several constraints. Most overseas demand is for kiln
Kiln
A kiln is a thermally insulated chamber, or oven, in which a controlled temperature regime is produced. Uses include the hardening, burning or drying of materials...
-dried products, and Ghanaian manufacturers lack sufficient kilns to meet that demand. The cheap air-dried processing method is not satisfactory because air-dried wood tends to destabilize over time. Foreign investment incentives are not so attractive in this sector as in others, for example, mining
Mining
Mining is the extraction of valuable minerals or other geological materials from the earth, from an ore body, vein or seam. The term also includes the removal of soil. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock...
. Furthermore, infrastructure in the Western Region where lumber processing is located continues to be relatively neglected compared with mining and cocoa production regions. Other difficulties include lack of expertise at technological and managerial levels. Scandals have been reported in Ghana's forestry industry since 1986, and they erupted again in early 1992. The most notable case involved African Timber and Plywood, once Ghana's largest exporter of round logs. In the mid-1980s, the government embarked on a US$36 million rehabilitation project to boost the company's production. In 1992 as much as US$2.3 million was alleged to have been siphoned off from the project through various malpractices, and a number of officials were arrested. Furthermore, the environmental group, Friends of the Earth
Friends of the Earth
Friends of the Earth International is an international network of environmental organizations in 76 countries.FOEI is assisted by a small secretariat which provides support for the network and its agreed major campaigns...
, alleged that there had been additional thefts by numerous foreign companies totaling almost US$50 million in hard currency during the 1980s. In 1992 the government began investigating the activities of hundreds of companies, both foreign and local, that were alleged to have entered into a range of illegal dealings including smuggling
Smuggling
Smuggling is the clandestine transportation of goods or persons, such as out of a building, into a prison, or across an international border, in violation of applicable laws or other regulations.There are various motivations to smuggle...
, fraudulent invoicing, violation of local currency regulations, corruption, bribery
Bribery
Bribery, a form of corruption, is an act implying money or gift giving that alters the behavior of the recipient. Bribery constitutes a crime and is defined by Black's Law Dictionary as the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or...
, and nonpayment of royalties
Royalties
Royalties are usage-based payments made by one party to another for the right to ongoing use of an asset, sometimes an intellectual property...
. The corruption is so wide spread, however, that it is unlikely that the Ghanaian authorities will stop timber-related crimes anytime soon.