EXECUTIVE SUMMARY

The first forest charges were introduced into Nigeria during the colonial era, when a variety of charges were introduced with the aim of discouraging farmers from destroying trees as part of their shifting cultivation activities. As time went on, the Nigerian forest revenue system developed to include: new legislation to formally assign authority for assessing forest charges; the development of models for assessing charges, the introduction of new types of fees, changes in the level of charges; the development of concession arrangement for forest harvesting; and revenue sharing formulae.

The various states in Nigeria operate different types of charges, the main ones of which are: stumpage fees; out-turn volume fees; and unit area charges. There are also charges levied on different types of machinery used in the forest industry and charge on the production of non-wood and minor forest products. The level of these charges varies from state to state and from species to species. The southern states derive most of their revenues from stumpage, out-turn volume and unit area charges and charges on machinery. On the other hand, most of the northern states rely on charges on non-wood and minor forest products for the majority of their forest revenues.

Stumpage fees, which are the most widely used type of forest charges, vary from as much as N 1,500 per tree for species such as Teak, to as low as N 50 for species such as Brachystegia, depending on the quality, availability and demand for the wood involved. Out-turn volume fees vary from N 2 per cubic foot for Gmelina in Kogi State, to as high as N 70 per cubic foot for Teak and Afzelia. The unit area charge depends on the stocking of the forest and may be between N 2,500 and N 4,200 per hectare cut. Other charges on the forestry sector include: development levies; contractors registration fees; application fees; ground rent; and property hammer (pass hammer) registration fees. Some revenue is also derived from fines and auctioning of confiscated products.

Charges on non-wood and minor forest products are not as high as those on timber. They range from N 10 per month per person for producing reading slates to N 200 per person per month for collecting fire wood in Taraba State.

The administration of forest charges is the responsibility of the State Forestry Services, while the government has the power of approval. Because of the dual ownership of natural forests, forestry services decide on the level and type of logging activities that will be allowed. However, these decisions are largely based on pressure from government to collect high levels of forest revenue, rather than on the principles of good forest management. For example, revenue targets in any year are often determined by the level of revenues obtained in the previous year. If revenue collection is high in a year there is likely to be an increase in the target for the following year and vice-versa. Forest charges are collected at the regional headquarters, by forest guards, at road blocks and by patrol teams.

In most states, there has been a significant improvement in revenue generation over the last decade, particularly in the last three years (1997 to 1999). The main sources of forest revenues are charges on timber in the rainforest states of Ondo, Oyo, Osun, Edo, Ekiti and Ogun that, in total, account for about 63 percent of total revenue collection in Nigeria. Other sources of forest revenues are: charges on pole production (18 percent); non-wood and minor forest product charges (13 percent); fuelwood charges (3.5 percent); licences fees (2 percent); and forest recreation fees and penalties for forest offences (both less than one percent).

The forestry sector is funded through a number of government institutions, such as: the Federal Department of Forestry; the Forestry Research Institute of Nigeria; forestry departments in the various universities; and various schools of forestry and vocational training centres. Each of these institutions has specific responsibilities to carry out various activities. However, the performance of these institutions has suffered due to the low level of funding in the last ten years.

A number of forestry projects have received foreign assistance in the last ten years, from agencies such as: the Food and Agriculture Organisation of the United Nations (FAO); the United Nation Development Programme (UNDP); the Government of Finland; the World Bank; the African Development Bank (ADB); the European Union (EU); the International Development Association (IDA); and the Global Environment Facility (GEF).

The forest revenue system in Nigeria is weak and inefficient and is not designed to maximise the diverse range of benefits that could be produced from Nigeria’s forests. Poaching and illegal harvesting are rampant, causing the Government to loose huge amounts of potential revenue. The attitude of the current administration towards forestry is encouraging and it is hoped that sufficient funds will be made available to the sector in coming years. This attitude may also lead to a solution of some of the current problems in the forestry sector, with a relaxation of all forms of wood export restrictions, a reorganisation of the forest revenue system and the involvement of all stakeholders in revenue system formulation, collection and sharing.