Liberia is situated on the West Coast of Africa. The population of the country is estimated at 2.5 million people with a growth rate of 3.2 percent per annum. The country's land area covers 37,150 square miles (9,675,000 ha). Of this, National Forests and one National Park occupy 2,085,898 ha. The forestry sector is a major source of revenue. The sector's contribution to GDP and foreign exchange earnings ranged between 4‑8 percent and 5‑9 percent respectively prior to the inception of the civil crisis.
The granting of Forest Products Utilization Agreements (contracts) is based on size classes of holdings (Class A, B and C). The duration of an agreement is 25 years. Timber production in the natural forest is controlled and regulated by a forest management plan, which has two instruments of control (annual cutting of only 4 percent of an allotted concession area and diameter cutting limits on different species). Besides these measures, there are forestry laws, policies, rules and regulations in force to ensure the sustainable management of the forest and associated resources.
Only foreign companies carry out timber production and processing in the forestry sector. There are no state owned forest enterprises. Production charges are based on volume and the basic unit for forest timber revenue assessment is the cubic meter. Forest revenue generation is determined by the application of volume-based charges and land rental charges. In addition to these, special charges (referred to as administrative fees) are also levied.
There are no land rental charges on privately owned forest lands or charges on processed forest products designated for domestic consumption, but annual permit fees are levied for the production and sale of non-wood forest products. In addition, charges on processed forest products designated for export are very low, with the aim of promoting domestic processing. Furthermore, simple annual permit fees are levied for the hunting of animals and bushmeat sales.
The monitoring, assessment of production and generation of primary statistics is the sole responsibility of the Forestry Development Authority (FDA). However, the determination of forest charges is carried out by the Ministry of Finance and the FDA in collaboration with an inter-sectoral committee of ministries and agencies, comprising experts in finance, law, economics, forestry and management. Charges are regularly updated, based on fluctuations in world market prices (FOB) and local production costs. For any new charge structure, a regulation is promulgated, published in the print media and made publicly available prior to enforcement.
The procedure for the implementation of the forest revenue system is simple. The rules for assessment, payment and collection are clear. Notwithstanding this, the level of actual collection is not satisfactory. Actual collection accounts for only 30 percent of what should be collected, while arrears constitute the remaining 70 percent (in 1999-2000). In addition, assessed charges are low, on average accounting for only 6 percent of the FOB value of products (in 1998-2000).
The forestry field services and forest revenue collection efforts are weak. They must be strengthened in order for the forest revenue system to have a positive impact on sustainable forest management. This would enable the Government of Liberia (GOL) to realise the full revenue generation potential of the forestry sector.
The forest revenue collected is shared only between the Ministry of Finance and the Forestry Development Authority (as spelled out in the Executive Order No. 4, dated 22 June 2000). Liberia is a unitary state, so the collection of forest revenue is centralised and does not involve regional administrations. Furthermore, revenue is not shared directly with other stakeholders. In addition, there are no grants or subsidies for stakeholders operating in the forestry sector. These conditions make the net effect of the forest revenue system unfair and inequitable.
The Government of Liberia’s present attitude towards the sustainable management of the forest and associated resources is positive. Recent pronouncements and policy documents include the Forestry Law (approved 6 April 2000) and Executive Order No. 4 (22 June 2000), which aim at the strengthening of the financial capacity of the FDA. The GOL also recognises that increased domestic processing and environmental protection are two of the surest ways of sustaining the forest estate. The present Government has constituted a Commission on the Environment.
However, forestry research, reforestation and wildlife management programs and projects are yet to be restored to their pre-civil crisis status. There is a need to prioritise these areas of forestry undertakings in the years to come. The current budget of the FDA is estimated at USD 7.9 million and USD 3.3 million is allotted for forestry research, reforestation and wildlife management. This is a positive sign and, therefore, these budget allocations must be obtained for the enhancement and sustainability of the nation's forest resources.
