The main government forestry institution in Liberia is the FDA. The procedures to plan, prepare and approve the annual budget of the FDA are well designed and are explained below.
The budget process begins every year with the appointment of a budget committee, headed by a chairman and comprising a representative of each functional division (department). Every divisional manager directs each section or unit head under their supervision to prepare a budget and work-plan. The manger then consolidates the submissions to produce a divisional budget and work plan, which is sent to the budget committee. These are then reviewed and consolidated by the budget committee, which produces a comprehensive draft budget.
The draft budget is sent to the Executive Nucleus (Managing Director and Deputies) for review, comments and suggestions. If there are doubts, the budget committee is invited to clarify any potential problems. Following this, the budget is sent back to the budget committee, which produces a final draft and sends this to the Executive Board for review and action.
The Executive Board meets the Executive Nucleus (with the budget committee present) at a budget hearing. The budget committee takes into account the views of the Executive Board and produces the final budget for approval by the Executive Board and implementation.
The FDA budget comprises two parts: the recurrent (or operational) budget and the conservation (or development) budget. The conservation budget is used to finance reforestation, wildlife and research programs and projects.
Prior to Executive Order No. 4, forest charges were collected in two categories by the MOF and FDA as follows:
The MOF collected stumpage charges (Severance Fee, IIF and Forest Products Fee) and Land Rental Fees. Twenty percent of the revenue collected was transferred to the FDA to cover operational costs (e.g. salaries and other recurrent expenditures) and the other 80 percent was retained by the MOF for use by the central government.
The FDA collected revenue from the Reforestation Fees, Conservation Fees and Forest Research Fees and used 100 percent of this for forest plantation and conservation activities.
The current arrangement for distributing the forest revenue collected by the MOF (since Executive Order No. 4) is shown in Table 19. In addition to this, the FDA must use the Reforestation Fees, Conservation Fees and Forest Research Fees that they collect in the way shown in Table 20. Basically, the majority of these revenues must be used for forest conservation and development programs and projects. One other source of budget revenue for the FDA is the miscellaneous fees and charges on NWFPs (see Table 9 and Table 10), which they collect and retain in full.
Table 19 Distribution of forest revenue between MOF and FDA
|
Charge |
MOF share (in percent) |
FDA share (in percent) |
|
Stumpage charges |
|
|
|
- IIF |
98 |
2 |
|
- Severance Fee |
98 |
2 |
|
Land Rental Fee |
50 |
50 |
Table 20 Budget allocations of forest revenue collected by the FDA
|
Charge |
Recurrent budget |
Conservation budget |
|
Reforestation Fee |
2 |
98 |
|
Conservation Fee |
2 |
98 |
|
Forest Research Fee |
0 |
100 |
The current FDA Budget amounts to USD 7.9 million of which the recurrent budget accounts for USD 4.6 million and the conservation budget amounts to USD 3.3 million. The detailed expenditure estimates are shown in Table 21 and Table 22.
Table 21 The recurrent budget of the FDA for the financial year 2000-01
|
Cost centre |
Amount |
Total |
|
|
(in L$) |
(in USD) |
||
|
1. Staff |
|
|
|
|
a) Salaries |
6,427,583 |
- |
160,690 |
|
b) Benefits (transportation, medical and social security) |
4,102,740 |
204,848 |
307,416 |
|
2) Capital expenditure |
73,500 |
643,405 |
645,243 |
|
3) Operating expenditure (running costs) |
- |
- |
- |
|
4) Renovation (HQ) |
- |
1,366,995 |
1,366,995 |
|
5) Debt servicing |
|
|
|
|
a) Foreign |
- |
488,770 |
488,770 |
|
b) Local |
389,224 |
446,667 |
456,398 |
|
6) Contingency (9.5 percent) |
- |
436,221 |
436,221 |
|
Total |
17,582,347 |
4,124,424 |
4,563,984 |
Table 22 The conservation budget of the FDA for the financial year 2000-01
|
Cost centre |
Amount |
Total |
|
|
(in L$) |
(in USD) |
||
|
Salaries |
1,582,836 |
- |
39,571 |
|
Benefits (transportation and medical allowances and social security insurance) |
1,594,914 |
30,600 |
70,473 |
|
Operating expenses |
3,866,000 |
107,000 |
203,650 |
|
Capital expenses |
7,374,980 |
459,519 |
643,894 |
|
Renovation and construction (Sapo and reforestation infrastructure) |
20,000,000 |
- |
500,000 |
|
Research and development |
73,160,200 |
- |
1,829,005 |
|
Contingency (8.06 percent of operational capital) |
- |
68,254 |
68,254 |
|
Total |
107,578,930 |
665,373 |
3,354,847 |
Foreign assistance to the FDA is currently very insignificant. Assistance mainly comes in the form of travel tickets and daily subsistence allowances to pay for staff to attend workshops, conferences and short-term training courses abroad. However, a few consultants have been seconded to carry out short-term consultancy work in Liberia (about four people since 1997).
The FDA doesn’t receive any grants or subsidies from any domestic source, but benefits from some grants through the Society for the Conservation of Nature in Liberia (SCNL) supported by Conservation International (CI) ant the World Wildlife Fund (WWF). These grants are used for the assessment of the status of Sapo National Park, with the aim of producing a comprehensive management plan for the area.
There are three other government forestry institutions in Liberia
The Forestry Department and Wood Science Laboratory at the College of Agriculture and Forestry, University of Liberia. The university provides degree level training in forestry. It has been reopened but needs more support to restore it to its condition before the civil crisis. For example, the laboratory is completely damaged and inactive.
The Forestry Training Institute (FTI). The FTI provides training to certificate and diploma level. It is completely damaged and has not been reopened.
The Association of Forest Industries (AFI).
The funding received by forest research and training institutions is very minimal, so their expenditure is limited. The funding that they do obtain mostly covers staff salaries and allowances for students. It is estimated that total funding and expenditure does not exceed USD 100,000 per year for these institutions.
It is regrettable that the forestry research programmes in Liberia are virtually dormant due to the lack of funds. The country currently suffers from a lack of domestic investment and foreign assistance. The German Forestry Mission (GFM) to Liberia generously funded forestry research and reforest ation programs before the civil crisis, but has not returned. The management of FDA is keen to re-establish this co-operation with the GFM and others, but has had little success to date.
Currently, there are no grants or subsidy schemes available to companies and individuals (including indigenous people) operating in the forestry sector in Liberia. Companies raise their own investment funds, although the Government requires them to retain 20 percent of their profits in Liberia for re-investment in the economy. The Government also requires them to have a local investment partner (see Section 1.4.1).
However, the Government does offer some indirect subsidies, such as exemptions from some types of tax. The incentives currently available in the forestry sector are the following:
duty-free privilege on importing equipment for the establishment of wood processing plants;
income tax holidays (about 5 yrs.);
exemption of logging equipment from custom duties for a special period (2 yrs);
minimum taxation on processed and manufactured forest products; and
tax exemptions on medical instruments (equipment) and supplies.
The economy of Liberia is based on free enterprise and there are currently no state enterprises operating in the forestry sector.
