FACTORS LIKELY TO INFLUENCE FORESTRY IN UGANDA DURING THE NEXT TWO DECADES

The most important external factors influencing the forestry sector in Uganda today are population growth and economic growth. These two factors directly or indirectly influence important trends such as the energy consumption patterns, agricultural productivity and the growth of other sectors in the economy which in turn have an impact on the demand and supply of forest products and services. Below is a description of the most important external trends likely to influence the forestry sector in Uganda today.

The Impact of Population Growth on the Forestry Sector

The rapid population growth in Uganda has led to increased deforestation in peri-urban areas and the densely populated fragile highlands in the east and south west. The increase in urban population corresponds to the increase in the demand for charcoal of 6% per annum. This has serious implications on deforestation. Charcoal production accelerates deforestation because unlike firewood, which is mostly got from dead branches and stems in rural areas, charcoal production involves the felling of live trees. Charcoal production is also highly inefficient due to wasteful technologies currently in use. The rate of urbanization is faster than that of population growth and unless something is done to provide cheaper fuels to the urban population, deforestation is expected to increase at a similar rate if charcoal remains the dominant fuel for the urban dwellers. The consumption of sawn timber and poles are also increasing with urbanization. Most of the private forests are located in the less densely populated areas around Lake Victoria and the islands. These are also near to the biggest urban centers in Uganda and are a source of construction materials as well as charcoal. These forests are the most threatened in the country. Agricultural expansion into forestland has been discussed in detail under developments in agriculture.

The Impact of Economic Growth and its Related Effects on the Forestry Sector in Uganda

For the past 10 years GDP growth in Uganda has exceeded population growth indicating a slight improvement of per capita income in real GDP terms. Since the late 1980s and early 1990s poverty levels have been declining largely due to increased economic growth. There is better distribution of wealth in the rural areas as opposed to the urban centres. On the whole, analysts have revealed that an annual decline of 2.5% in absolute poverty was registered in the country between 1992 and 1996 (NEMA, 1999). Uganda is in its early stages of development and as such the rapid economic growth will inevitably impact on the forestry sector for at least the next 20 years. It has accelerated urbanization and with it the demand for charcoal as already discussed. It has led to the growth of building construction and therefore increased the demand for timber and poles for furniture and construction. Economic growth however is also expected to have positive impacts in the long run. It is expected that it will lead to a shift to use of alternative sources of energy, alternative construction materials and furniture other than those from wood, agricultural intensification, increased ecotourism and the development of other sectors in the economy which should reduce the population’s dependency on land. Some of these tends are already evident and are in government plans such as the Poverty eradication action plan (PEAP) and the Plan for the Modernisation of Agriculture (PAM). Some important trends about Uganda’s economy and developments in other sectors likely to influence the forestry sector are outlined as below:

The PEAP strategic objective on forests is to enhance sustainable natural resource management and biodiversity conservation, raise public awareness and ensure access to least cost energy sources. Afforestation and reforestation programs through large scale and household programs, private and public peri-urban tree planting are some of the priority actions to be undertaken by the year 2020. If this plan is adhered to, the demand for forest products will not have adverse effects on the environment.

Changes in relative role of different sectors

Uganda’s economy mostly relies on the primary sector, especially agriculture. Appendix 3 shows the structure of the national economy and the major sector contributions comparing 1992 and 1997. It has been the policy of government to address this imbalance by favouring development in the industrial and services sectors. The services sector has been largely stagnant for some time but growth in the manufacturing, construction, transport and hotel sectors have registered significant growth. However, agriculture is being promoted as the vehicle for poverty eradication in Uganda and will therefore continue to dominate Uganda’s economy in the next 20 years. Agriculture expansion is expected to have adverse impacts of forestry if this is not combined with proper land use planning to guarantee control of deforestation, soil erosion, loss of biodiversity it will not be sustainable.

Impact of Modernisation of Agriculture of Forests

Modernisation of agriculture may put more pressure on land resources as large tracks of land are opened for cropping. There is a misconceived idea that Uganda has 16.7 million hectares of arable land and only 32% of this is under cultivation. Most of this so-called arable land is under forests, swamps and woodlands, which are also very necessary for our well being. The expansion into new areas may spell deforestation, loss of biodiversity, increased use of agro-chemicals and possible pollution of surface and ground water. The modernization of agriculture in Uganda could lead to loss of our natural forests and the associated biodiversity, on private land while increasing the number of planted trees on farms. This can be avoided if it emphasizes agricultural intensification as opposed to expansion and the promotion of farm forestry. Trees as an agricultural commodity have offered farmers an economic alternative of using marginal land and have relieved the natural vegetation of pressure. They can provide a means of rehabilitating degraded land and raw materials for small-scale industries in rural areas.

Developments in the Industrial and Services Sectors

Though dependency on agriculture is still heavy, its contribution to GDP is slowly declining while that of manufacturing is increasing. The growth in the manufacturing sector has been boosted by increased foreign investment to the tune of USD 834 million and joint ventures to the tune of USD 507 million in the fiscal 1997/98 (NEMA, 1999).

There is still lack of competitiveness in the manufacturing sector with regard to international and regional markets. Industrial growth is still too low to absorb the labour force sufficiently to significantly reduce pressure on the forest resource. Some industries like tobacco, tea, lime production and fish processing depend heavily on trees for fuel though efforts have been made by some of these industries such as Rwenzori Highland Tea Co. and British American Tobacco to plant trees to meet their own needs. Increase in activities of such industries could lead to increased tree planting if well guided. Uganda has comparative advantage in agro-processing, tourism and mining industries and these are expected to dominate in the year 2020.

The rapid rate of building construction is due to the fact that the building boom comes after nearly two decades of very little construction. There is therefore a large backlog in this field as well as an acute shortage of housing in many towns for example, in 1996, only about 8% of Ugandans lived in permanent structures (UNIDO, 1997). There is a near three-fold increase in construction from 1985/86 to 1994/95.

It is expected that rapid growth will continue up to 2020 and the demand for forest products is expected to grow almost as fast as the industry itself. Much of the timber is from tropical high forests though market for timber from coniferous plantations has been increasing. The furniture industry is closely linked to economic growth and disposable incomes and is highly dependent upon the availability of sawn timber and cane products from the country’s forests. Natural forests provide the prized hard wood for this industry and for construction. Due to increased protection of Uganda’s natural forests, today a good amount of hard wood is smuggled from neighbouring D.R. Congo. It is expected that natural forests on private land will be exploited excessively to serve the growing construction and furniture industry. Unless commercial tree planting is done on a large scale and non-wood substitutes are adopted for energy and construction, it is estimated that within 20 years Uganda will actually be importing timber.

Under the Forest Resource Management and Conservation Program (FRM&CP), mechanisms will be developed to involve the private sector in ecotourism initiatives and joint ventures with the communities. Some factors that have hindered the development of ecotourism in Uganda include poor accessibility to some tourist sites, poor hotel facilities in most areas, insecurity and poor publicity. Other constraints are the high cost of fuel as compared to neighbouring countries, high electricity, telephone and water tariffs which make tours to Uganda prohibitive. For example, Ugandans find it cheaper to go for holidays to say Whitesands Hotel in Mombasa in Kenya than to Mweya Safari Lodge in Queen Elizabeth National Park.

Energy Use

Causes for Increased Biomass Demand: The increasing demand for biomass energy over the years is due to increase in national human population and an increased influx of refugees. There has also been a lack of affordable alternatives. Wood fuels are obtained from bush land (30%), woodland (20), arable agricultural land and fallow land (48%) and natural forests 2% (UNDP/ESMAP, 1996).

Charcoal Production and Its Impact on Forests: Charcoal is mostly used in the urban areas. Most charcoal is produced from private land and the implications are that increasing urbanization will lead to increased deforestation.

The government has stepped up efforts to make alternative sources of energy available to Ugandans. There is considerable effort to increase use of electricity. Currently about 5% of the population uses electricity. With increased industrial activities in the country, the demand for energy is expected to increase.

Assuming an annual GDP growth rate of 6%, demand for electricity and petroleum is projected to increase at around 6-7% per year (ESD, 1996). To date, the increased demand in the industrial sector of 14% has not yet been matched by increased production in electricity. So far the commissioning of the second power plant of 200mW capacity has already been done and this has increased on electricity production. The National Biomass Study of the Forest Department estimates that Uganda’s hydroelectric power will still account for only 5% of total energy consumption by the year 2015 even with the planned increase in production and reduction in tariffs.

The consumption of biomass energy is expected to increase with population at a similar rate of 2.5%. The use of alternative energy sources (wind, solar, geothermal and biogas) is expected to increase in response to the rising demand. Exploitation and development of renewable energy sources could contribute to environmental conservation and change the status of rural Uganda by improving the quality of life. The Chinese Government has committed about $ 170,000 for the construction of 20 demonstration biogas digesters and training of Ugandans in the design construction and maintenance. The Indian Government has also expressed interest in biogas development in Uganda. There has been an effort to increase the use of solar energy by the government but most Ugandans still cannot afford the technology. Uganda has a high level of solar insolation and sunshine all year around. The potential for harvesting solar energy is therefore great (NEMA, 1999). There is also potential for biogas production especially for those households that rear cattle.

It has been estimated that over 17,000 tones of charcoal per annum can be saved if only 15% of urban households use improved, well-made, energy-efficient charcoal stoves with end use efficiencies of 30% (ESD, 1996). There has to be work on training, stove quality control, promotion and monitoring in order for these benefits to be achieved. There has been effort to increase efficient use of biomass energy by improving rural energy cook stoves, lime production and rural traditional charcoal production through training and construction of demonstration kilns for lime and charcoal production. The Netherlands Government is supporting this effort through the Ministry of Energy.

Uganda needs to ensure that all trees felled are utilized as fully as possible. At the moment there is much wastage of the forest resource base in wood based industries due to inefficiency of machinery. The conversion of both indigenous and plantation timber is generally inefficient (about 25% when 50% to 60% is possible).

Expected Impacts of Development of the Transport Sector on Forestry

The development in transport and telecommunications is expected to have a positive impact on the forestry sector. It will be easier and faster to access information, which should lead to better management of the forest resource. It will also be easier to access the forests hence enabling better management. This will also encourage tourism, which should in turn generate an income for the management of gazetted forest reserves. The unprotected forests on private land may however be more heavily exploited as their accessibility is increased.

Economic Liberalization

Uganda has pursued policies aimed at promoting the growth of a market-based economy with less central government involvement. The key for accelerated economic development is believed to be decentralization and private sector development. The promotion of market-based development was introduced when market failures were still prevalent in the economy. Ownership of property, particularly land was not streamlined when the development strategy was adopted. This is particularly important, bearing in mind that Uganda’s economy is heavily dependent on natural resources. The over exploitation of natural resources for economic gain was partly due to lack of/or inadequate environmental policies and regulations to guide the use of the environment and natural resources when the strategy was adopted. It is believed that unregulated production and consumption activities are likely to have negative impacts on the environment, making sustainable development difficult to achieve in the process (NEMA, 1998).

Economic liberalization is associated with increased industrialization, increased GDP and more employment opportunities. To some extent this has been realized. A few industries have been established in Uganda but these face stiff competition with foreign industries, which produce cheaper and better quality products. While Uganda has provided a market for foreign products, the country has not benefited much from markets abroad. The export base continues to decrease while the imports increase hence making the local currency weaker as compared to the US dollar. As percentage of GDP, total export of goods and services declined 25.9% from 1996 to 1998.

Uganda has a favourable climate for forestry. This can be exploited to produce timber for export to neighbouring countries (currently, timber exports are banned). To the south is the heavily populated Rwanda, to the North is mostly desert-like Sudan, and to the East is Kenya that has lost most of her forest cover. The forests in Tanzania are mostly in the South and currently geared towards export markets of South Africa. Uganda is however disadvantaged as far as international trade is concerned. The bulk of wood and non-timber products are exported in semi-processed forms, denying it opportunity for job creation and profit from value added products. Uganda’s capacity for investment in industries capable of manufacturing competitive and quality goods remains weak. Uganda needs to develop ecotourism as it has comparative advantage in this as well as agricultural production.

The following is an account of trends within the forestry sector likely to have an impact on the future of forestry in Uganda.

Policy and Institutional Changes

Government is restructuring the forest sector. It will adopt a sectoral approach and hence consolidate the forestry mandate. The forest department will be transformed into a semi autonomous agency, which will clearly separate the production and normative roles of government. Planned government policy is to devolve and privatise production activities in forestry. The local communities and the private sector will play a more prominent role in the development of forestry in future. Administrative levels that are closer to households, preferably the local councils will implement farm forestry in particular according to the PMA. The proposed Forestry Policy and Forestry Act seeks to extend the forestry frontier beyond the narrow forest reserves confines into people’s households. Stakeholder participation, holistic approaches in addressing farmers needs, partnership and cooperation of all stakeholders and sustainability and protection of the environment are fast gaining importance in forestry in Uganda. They are expected to provide an interface for linkage between modern forestry and modernization of agriculture (MFPED, 1999). Pilot projects on collaborative forest management and ecotourism are currently under way in the Forest Department. Some of the negative impacts of this new institutional set up have been discussed in Chapter 5 under accomplishing the vision

Impact of Global Initiatives on National Efforts to Develop Forestry and Protect the Environment

Uganda is signatory to many international agreements and conventions concerning the forest sector. Below is an account of the country actions towards implementation of some global initiatives.

One of the mechanisms for mitigation of climate change spelt out by the Kyoto Protocol and relevant to developing countries is the Clean Development Mechanism (CDM). The CDM permits developed countries to buy emission reduction units from developing countries in order to meet industrial emission commitments. The CDM intends to assist countries in implementing sustainable development and in obtaining funds to carry out project activities resulting in certified emission reductions of GHG. Carbon emission reductions can be banked or sold by the respective developing countries from the year 2000. Reduction in emissions will only be certified if they are additional to any that would occur in absence of the project activity.

Action Towards Implementation of CDM in Uganda: The Meteorological Department in Uganda is the focal point for developing guidelines for the implementation of the CDM. It has put in place a 2-year project to kick-start the CDM process and encourages actual CDM investments within acceptable national and international frameworks. Task forces have been established in the Forest Department, Energy Department, and Transport sector and will also involve socio economists. The task forces are to develop criteria for screening CDM projects. Such projects should be within national development plans, be sustainable, attractive for investment and should not encourage environmental degradation.

The Issue of Funding Forestry Projects through CDM: The EU/UK does not see carbon sequestration through the forestry sector as eligible under phase 1 i.e. 2000-2012. It is therefore possible that this initiative may not have a significant impact on the forestry sector in Uganda by 2020. The development of ecotourism, horticulture and agro forestry are some of the areas that are being fronted by the forestry task force in Uganda as relevant to the CDM. Mere tree planting is regarded as inadequate as the trees may be cut down and burnt hence releasing carbon dioxide in the atmosphere.

The UN ad hoc Inter-governmental panel on Forests (IPF) and the Inter-governmental Forum on Forests (IFF) has been assessed by Uganda through a national consultative process to investigate their relevance to our situation and to work out strategies on how they can be incorporated in our national forest program. Their value in relation to national priorities has also been assessed and proposals for integration into national programs made. The National Forest Program has specifically been identified as the vehicle for the implementation of the IPF proposal. The IPF Program Element II covers financial assistance, technology transfer, capacity building and information. This element could be used to attract foreign investment in the forestry sector in Uganda.

The Convention on Biological Diversity confers upon the country the sovereignty over her genetic resources and stipulates that access to the resources must be on mutually agreed terms, negotiated on the basis of prior informed consent. The government of Uganda is aware that access to genetic resources in Uganda’s forests has been largely unregulated, with an inadequate framework for granting prior consent and certainly no mechanism for fair and equitable sharing of benefits. There is therefore need to improve the regulatory framework governing the access to the genetic resources in Uganda’s forests. Efforts are in progress to address these issues and to allow access to these resources for economic development. There is a growing realization that the conservation of biodiversity has to be justified in economic terms otherwise it will not survive the pressure from the growing population.

Actions on the Convention on the Protection of Biodiversity: Uganda commissioned a study to evaluate the implications of ratifying the convention on biological diversity in 1996. The study recommended that policies to do with biological diversity should be changed to incorporate the provisions of the convention. It also recommended a review of the legislation on intellectual property rights in relation to biological diversity conservation and utilization to modernize protection of intellectual property in the context of emerging international trends. Various studies were made aimed at legislative reform in various bio-diversity related fields such as forestry, wildlife and national parks, fisheries and wetlands. Apart from this various policies, programs and plans have been created and approved by government these include:

The National Environment Management Authority policy,

The Wetlands policy and the wildlife and National parks policy,

The Forest policy is still awaiting approval.

With enabling policies and legislature in place, it is expected that the perception of policy makers, civil society and people as regards these initiatives will be improved. The National Environment Management Authority (NEMA) has been contracted to produce a national biodiversity strategy and action plan. This will hopefully address the integration of biodiversity and traditional knowledge in various land uses.

Investment in the Forestry Sector

There was a well-developed forest industry in Uganda in the early 1970s, mainly based on harvesting in tropical high forests, and owned by Asians. It included sawmills, a particleboard factory, a plywood line, a match factory and a number of treatment plants and drying kilns. Saw mill output was about 86,000 cubic meters in 1970. There was a severe decline over nearly two decades due to nationalization, civil war, and the expulsion of Asians, lack of spare parts and lack of skills. In 1995, the output was estimated at only about 12,000 cubic meters per year.

This shortfall has been compensated by a large increase in the activity of pit sawyers who now have a share of 90% of the domestic market. It was estimated in 1995 that about 3,000 pitsawyers were operating. This development has led to poor utilization of the forest resource. Pit sawyers only saw that part of the tree, which is convenient for them converting about only 25 to 30 % of the tree. They are wasteful in their conversion and they select only the best species leaving the rest to waste. Because of their cheap production costs and frequent avoidance of royalty payment and sales tax, pit sawyers are able to sell valuable timbers at such low prices that investments and production in sawmilling is discouraged. This trend is being reversed as royalties have been increased and a number of mobile saw mills are now operating in forest plantations and natural forests. They are also producing at low capacity due to lack of skills and poor integration of the harvesting and the conversion activities as well as lack of saw doctoring/equipment and difficulties in provision of spare parts. In 1995, the total installed capacity was at 67,000 cubic meters (sawn) shared equally between hardwoods and soft woods. This indicated a capacity of less than 20% (Forest Department, 1995). The Norwegian Government is assisting Uganda to address some of these issues through the Combined Forestry Training Project.

Since the liberalization of the market in Uganda, private sector projects in the forest sector have increased. According to Uganda Investment Authority, in 1999 a total of 90 projects mainly in wood and wood processing were assessed. However only four projects were concerned with forest management. The planned forest investment in 1999 amounted to nearly US$ 80 millions and an employment of more than 4,500 jobs. With a calculated rate of return of about 5% for Eucalyptus plantations, it is not likely that there will be much investment in forestry by the private sector though Uganda has a favourable climate for forestry (Falkenberg et al, 2000).

Large-scale sustainable private sector investment in forestry will largely depend on the availability of affordable funding for forestry projects and security of land tenure among other factors already mentioned. Future investments in forestry in Uganda seem to favour foreign investors more than Ugandans. This is because foreign investors have easy access to credit schemes, soft loans, subsidies, insurances and guarantees that local investors do not have. In Uganda, the main financial institutions that support the private sector are development banks and commercial banks. Loans to the private sector have mainly gone to wood processing enterprises, with practically none into forest management or afforestation projects. There has been an interest by EU to fund private sector tree planting initiatives. The Uganda Forest Department is in the process of developing guidelines on how this is to be done. This initiative is in realization of the fact that protection of natural forests needs to be followed by tree planting activities in order to be sustainable. The project is expected to start in the year 2001.

Private sector participation is hampered by:

Lack of skills,

Inadequate tree and land tenure arrangements,

Poor quality of seed and planting stock for plantation forestry,

Market disincentives for investment and re-investment of profit,

Lack of appropriate information,

Unrealistic pricing system that undervalues timber as used until the recent past,

Lack of transparency in offering of land permits,

Unclear conditions to replant trees in plantations,

In some cases, government and non-governmental subsidies have distorted the market forces of demand and supply making it unprofitable.

Technological Advancements, Transfer and change of Focus

Forestry research in Uganda was originally focused on forest conservation and management and was instrumental in bringing about the maintenance of the forest resource and increased productivity. Today, the lead agency for forestry research, the Forest Research Institute (FORI) under National Agricultural Research Organization (NARO) in the Ministry of Agriculture conducts research geared towards addressing national agricultural policy objectives of poverty eradication and sustainable development through agricultural modernization. Its future plans are to increase research into collaborative forest management with local communities, and to develop non-timber products among other issues.

Future plans for the development of plantation forests includes the development of indigenous tree species for forest plantations. There are indications that developments in the field of biotechnology elsewhere are being transferred to Uganda by the private sector. One company is already in the business of promoting fast growing eucalyptus species for electricity production. The Ministry of Energy is also using technological advancements in energy conservation from other parts of the world to improve efficiency of charcoal and lime kilns as well as cook stoves.