The East Africa region holds great potential to enhance the sustainability of both wood production and consumption, a recent event held in Nairobi, Kenya, concluded. Governments in the region have actively invested in planted forests while efforts are underway to enhance the sustainability and efficiency of wood processing. Furthermore, initiatives are promoting the use of wood-based products in place of more carbon-intensive materials. These coordinated efforts promise substantial environmental, biodiversity, and developmental benefits.  

However, various challenges hinder the scaling of these wood value chains, particularly for small forest and farm producers and small and medium-sized enterprises (SMEs). The challenges facing the wood value chains include the perception of forestry as a high-risk, fragmented, and informal value chain, unattractive investment conditions, and limited capacity among SMEs and local market participants to access finance. 

To address these issues, FAO, Gatsby Africa Foundation, the Swedish Embassy, CIFOR-ICRAF, the Kenya Forestry Research Institute (KEFRI), the Kenya Forest Service (KFS), and the Forest and Farm Facility (FFF) co-organized the event titled "Unlocking finance for sustainable and inclusive wood value chains: A dialogue toward collaboration on innovative financing opportunities and mechanisms to promote sustainable wood production and consumption in East Africa, including smallholder forest and farm producer organizations." 

Demand for wood in East Africa

Wood demand and consumption in East Africa is currently outstripping production. Meeting this growing demand presents opportunities, including expanding production through planted forests, delivering positive impacts for climate mitigation restoration, small producers and local communities in the form of livelihood and development benefits. Improved efficiency of wood utilization through capacity building and integration into circular and bio economies will also be critical. 

For these potential opportunities to become real, there is a critical need to address key challenges. The scale of finance required to unlock these potential opportunities is substantial, necessitating investments in sustainable forestry practices, infrastructure development, and capacity-building initiatives. 

There is also a need to improve the outreach, allowing more finance and opportunities to flow to smallholders. This is imperative to ensure that financial resources and opportunities are accessible to smallholders, fostering equitable participation in the sustainable wood production and utilization sector.

These are critical steps in establishing an enabling environment where investments in sustainable forest practices are seen as more attractive than continuing unsustainable, and sometimes illegal, “business-as-usual” approaches.  

Building momentum

The event builds on the lessons learned during a week-long workshop, which took place in April including a need for better linkages between smallholders and their organizations, better horizontal coordination within the value chain, increased business and enterprise management skills, and proactive engagement with local finance institutions. The workshop further highlighted that inclusive forest value chains need to be promoted by governments.

Stakeholders at the workshop discussed potential strategies to address these lessons learned. In particular, looking at opportunities for collaboration and next steps for scaling up results and accelerating the mobilization of finance and sustainability.

The event preceded the International Congress on Planted Forests 2023 (ICPF2023) which is held in Nairobi from 7 to 10 November 2023. ICPF2023 will focus on the role of planted forests as nature-based solutions. The event complemented ICPF2023 by addressing new business models, investment opportunities, ecosystem restoration, and livelihood enhancement, promoting sustainable wood production and consumption. This synergy emphasizes the importance of wood value chains in the broader context of sustainable forestry practices.