REVENUE COLLECTION AND DISTRIBUTION

In 1993, the Federal Government directed all state governments to pay 10 percent of revenues generated into a Forestry Trust Fund for the management of forest resources. This directive has not been implemented by many state governments. In Kano State, for example, no revenue has been generated for over five years. The forestry sector is seen there more as a promotional business than a revenue generating concern. In most states in the North, there is a practice of dual control or ownership of forests. The State Forestry Departments manage the forest estate, while the local government collects the revenue accruable from the exploitation of the forest resource.

The main sources of forest revenue in Nigeria are different in the two broad ecological zones of the wet south and the dry north. The southern states rely on charges on timber harvesting and processing for between 70 - 80 percent of their forest revenues. In particular, charges such as: stumpage; OTV; and registration/renewal of sawmills, resaw benches, property hammers and chainsaws, are the major sources of revenue in this zone. The dry states of the North derive a significant proportion of their forest revenues from charges on fuelwood, poles, gum arabic, honey, locust beans and game hunting.

Table 17 presents the average charges paid for forest products and services in Nigeria in 2000. The table shows ranges of charges for some of the products and services where the range of charges across states is so variable that an average charge would not be representative. All of these charges vary across states and products, but they vary considerably in some cases.

To summarise, the charges for forest industry licences and timber are the highest of all of the charges, followed by charges on non-wood and minor forest products. The charges for hunting wild animals, particularly large mammals, are also relatively high. The lowest charges are for fuelwood collection and forest recreation. However, the level of charges is not the only factor determining the total level of revenue generation. The amount of illegal production of forest products is another factor that has a major impact on forest revenue generation.

Table 18 summarises the total government revenue generated from forestry in Nigeria over the last decade. The table shows that there has been a significant improvement in revenue generation, particularly over the last three years (1997 to 1999). The probable reasons for this are:

recent increases in the tariff rates;

the effect of the creation of new states, which has led to an intensification in forestry activities in some cases (e.g. in Sokoto, Zamfara, Ondo, Ekiti, Oyo and Osun states); and

the government’s policy on timber exports introduced in 1995.

The average level of forest revenues collected in each state over the period 1991 - 1999 is also displayed on the map shown in Figure 5. As the map shows, the majority of forest revenues in Nigeria are collected in the states in the southwest of the country (Oyo, Osun, Ondo, Ogun, Ekiti, Edo and Kogi) and Cross River State. Each "dot" represents N 250,000 or just over US$ 2,000 (at the current market exchange rate).

Table 19 shows the sources of forest revenue generation in the country. To summarise, the revenue sources for the forestry sector varies from timber (62.8 percent), through poles (17.69 percent), non-timber and minor forest products (13.17 percent), fuelwood (3.50 percent), forest industry licence fees (2.26 percent), forest recreation fees (0.49 percent), to penalties forest offences (0.09 percent).

The detailed data showed that timber is the main source of revenue in the rainforest states of Ondo, Ogun, Osun, Edo and Ekiti and that these states accounted for a significant proportion of the 63 percent share of revenues from timber in the total. Most of the revenue from poles is derived from plantations of Teak and Nauclea diderichii. Although fuelwood is regarded as a minor forest product from the forest, it is a significant source of forest revenues in the savannah areas. Non-timber forest products seem to be less effective sources of forest revenues because of the difficulties of collecting fees on these products and the long duration (3 months) required to harvest some of these products.

Some states in Nigeria have adopted models of forest revenue sharing between state and local government and forest funds. The different models of forest revenue sharing currently in place in a number of states are shown in Table 20. Each state is independent of the others in terms of policies concerning the forestry sector. However, based on the historical relationships between states, some groups of states have adopted common models of revenue sharing. It should be noted that, although these models are set-out in legislation, they are not strictly in use in many cases.