STRUCTURE OF THE NIGERIAN FOREST REVENUE SYSTEM

Since late 1970’s, the collection of forest revenues has been primarily the role of the State Forestry Departments in Nigeria. The structure of the forest revenue system in Nigeria must, therefore, be viewed from the different policies of the thirty-six (36) individual states and the Federal Capital Territory (FCT). Each state has legal and administrative freedom to manage its forests in any way it wishes. However, the structure of the forest revenue system in most states contains the following common elements:

the authority to regulate and collect forest revenues;

various models for assessing forest charges;

a variety of types of fees used;

different levels of charges to reflect local conditions;

concession arrangements for long-term and short-term forest harvesting; and

revenue sharing formulae.

The State Forestry Services and FCT operate various forest revenue systems, which can be summarised as follows:

Timber production fees. Timber production fees are collected for the removal of timber products such as: sawlogs; veneer logs; poles; pulpwood; and fuelwood. The fees on these products are derived from models based on the following:

stumpage values;

out-turn volumes (OTV);

unit area charges;

weight (for pulpwood); and

time (for fuelwood).

Industry and enterprise fees. Industry and enterprise fees include the following:

fees for special development funds or afforestation levies;

industry license fees;

registration fees for holders of property hammers;

registration fees for timber contractors;

industry license renewal fees;

registration fees for forest machinery; and

mill relocation fees.

Non-wood and minor forest product fees. Non-wood and minor forest product fees are based on individual or household needs and time scale and include the following:

fees for the collection of leaves;

fees for tapping palm and making rafia wine;

fees for the collection of chewing sticks;

fees for the collection of ropes; and

fees for the collection of fruits.

Hunting and recreational forest land-use fees. Hunting and recreational forest land-use fees include the following:

hunting permit fees;

permit fees for special game (e.g. buffalo); and

fees for permits to reside in the forest.

Penalties for breaking the law. Legal penalties include the following:

fines; and

sale of confiscated forest products (usually by auction).

The models used to assess forest charges vary from state to state, but are broadly similar to those used in other West African countries. The choice of models used in each state is related to the level of forest wealth and administrative capabilities of each state. States with higher forest cover and forests that are more valuable generally operate a greater variety of revenue models than the poorly forested states.

The three main forest revenue models used in Nigeria are based on stumpage values, out-turn volumes (OTV) and unit area charges. The use of each of these models across the different states in Nigeria is shown in Table 2.

Fees based on stumpage values

Where standing timber is sold on the stump, the term stumpage is used. It is the earliest method of assessing fees payable for exploiting timber in Nigeria and is an in situ method. The value of standing timber is determined by deducting the cost of harvesting and marketing from the value of the roundwood. The remainder is then divided into an allowance for profit and risk (for the producer) and the stumpage fee (for the forest owner).

In every state, the State Forest Service has a list of tariffs for all commercial tree species, which is revised periodically (see the following tables and figures for further details).

This method is used in all of the States within the southern forest zone of Nigeria for trees taken from outside and within the forest estate. The stumpage rate varies from state to state, based on economic value and availability of the species as well as the level of revenue envisaged. In addition, different rates are charged depending on whether the trees are taken from inside or outside the forest estate, reserves or concessions. For example, the stumpage for Afzelia africana varies from N 26 per tree in Enugu State to as high as N 750 per tree in Ondo State. This variation may be due to the combination of relative abundance and low demand for this species in one state (Enugu) compared with non-availability and high demand in the other (Ondo).

In addition, the stumpage rate also varies by species. For example, in Oyo State the stumpage rate is as low as N 55 per tree for C. odorata but is as high as N 250 per tree for Afzelia africana, Mitrygina and Triplochiton, depending on the quality and the demand for the species concerned. The stumpage rate also varies over time and depending on the quality of wood (see Table 5 and Table 6). In all cases, high stumpage rates are a strategy to protect the first-class trees, such as Melicia excelsa and Entandrophragma spp, which are particularly threatened in dry lowland rainforest areas such as those found in Enugu State and Anambra State.