SOURCES OF FUNDING FOR GOVERNMENT EXPENDITURE ON FORESTRY

There are two main sources of funding for government expenditure on the forestry sector: external funding and domestic funding. Most countries provided information about funding from both sources.

External funding includes grants and loans from international agencies and development banks, bilateral development agencies and other international organisations such as charities and NGOs. It is difficult to identify exactly how much external funding is used to support the forestry sector, because funding programmes and projects are often quite broad. For example, many projects cover subjects such as environment and rural development, where forestry might only be one part of the overall package. The information presented by countries only included projects where it was felt that forestry was a major component. However, it should be noted that some of this money might not be spent on the forestry sector.

Most countries presented this information in the form of a long list of donor funded projects, although a few countries presented information about total external funding. In a few of the very poorest countries, external support is also given directly to the ministry of finance to support general government expenditure and, in countries where this occurs, this was included in the analysis.

Domestic funding includes expenditure by government forestry administrations, which can include national, state and local administrations. Most countries only presented information about expenditure by national institutions, except in a few countries that have decentralised forms of government (e.g. Ethiopia and Nigeria). Many countries have forest funds, with varying degrees of autonomy in the way that they are managed and controlled. In such cases, most countries were able to provide information about expenditure from such funds. In addition, a few countries were able to present information about expenditure on forestry by government institutions working in other sectors.

Again, it should be noted that in many countries the forestry administration is only part of a larger ministry or government department. Some countries were not able to identify separately the money spent on the forestry administration, so these figures might be slightly overestimated.

For the countries included in this analysis, the total amount of government expenditure on the forestry sector in 1999 is shown in Table 6. This table also shows the amount of external funding to the forestry sector in total and as a proportion of total expenditure.

Table 6 Sources of government expenditure on the forestry sector in selected African countries in 1999

This table shows the large variation in external funding between different countries in Africa. Based on this information, it would appear that countries tend to fall into three categories:

Some countries have relatively large, well-developed forestry sectors, high levels of government expenditure on forestry and relatively low levels of external support. These tend to be the countries where revenue collection is also quite high (e.g. Côte d’Ivoire, Central African Republic and Ethiopia).

Some countries also have quite high levels of government expenditure, but much higher levels of external support as well (e.g. Madagascar, Mali and Tanzania).

Most of the countries with generally low levels of government expenditure on forestry also have relatively high levels of external support. In most of these countries, forestry is not a major economic activity and is valued more for the socio-economic and environmental benefits that it can provide. These priorities are generally reflected in the types of projects and programmes that external donors tend to support.

For all of the countries shown in the table, the average contribution of external funding to total government expenditure on the forestry sector is 35%. Since 1990, this contribution has varied form 35% to 40% (see Figure 18). On the basis of the limited information available, it appears that external funding for forestry is very variable between years in most countries, while domestic funding is much more stable. It should also be noted that external funding is generally declining from the peak of US$ 132 million reached in 1995.

Figure 18 The trends in external and domestic funding for government expenditure on forestry in selected African countries