INTRODUCTION

Like many other countries in Sub-Saharan Africa, Zimbabwe’s indigenous forest stocks supply fuelwood for commercial sale and domestic consumption. The primary purpose of fuelwood collection is for cooking, in all rural areas and in many high-density suburbs in urban centres (Campbell and Mangono, 1995). Fuelwood harvesting is a contributing factor to deforestation, rated as the most serious environmental issue in the country during a 1992 national survey by the Ministry of Environment and Tourism (Marongwe and Milne, 1993). Policy makers, particularly those in central planning and finance agencies, are not fully aware of the monetary value of forest stocks in the country. This information gap pertains to both direct-use values from products such as fuelwood, fruits, fodder and building materials, and indirect values from ecological functions including reducing soil erosion and maintaining water quality. Without good information on the value of forests, policy makers are in a weak position to establish guidelines and institutions for addressing forestry management issues. With deforestation, policy formulation should be based on the total economic value of forest stocks, the costs of forest loss and the contribution made by fuelwood to these benefits and costs.

Measures such as gross domestic product (GDP) from the system of national accounts (SNA) are frequently used to value the contribution of various economic sectors (agriculture, forestry, etc.) to total national income. For man-made capital such as buildings and lorries, the SNA captures the normal depreciation of capital stocks to derive a net product. In forestry for example, the annual depreciation of harvesting and processing equipment used to manufacture commercial wood products is deducted when deriving value added. The same would hold for commercial logging of fuelwood. However, the SNA does not capture the depreciation of the natural capital (the forest stocks) upon which subsequent commercial uses are based. As well and of direct concern to this study, national accounts only measure market-based transactions and exclude consumptive uses such as domestic fuelwood cut by villagers, which occurs outside the market place. As a result of these conceptual problems, incorrect policy decisions may be made regarding forestry development, resource management and land use. A better approach for valuing natural resources such as forests is to try and measure the net product by accounting for the depreciation of the natural capital stock and include non-market costs and benefits. Then, the national accounts can be adjusted to show the macro-economic values of forest stocks and the costs of deforestation from fuelwood consumption.

Fuelwood is an appropriate variable to study in Zimbabwe because of the country’s high dependency on wood for energy, particularly in rural areas. About 70 percent of Zimbabwe’s energy consumption is derived from wood energy. This high figure is related to the fact that approximately 70 percent of the country’s population is rural based, often with poor access to electrical supply. Even where rural electrification has occurred, income constraints prevent many households (as opposed to businesses) from connecting to the grid and purchasing electrical appliances. These households continue to consume fuelwood for energy because of its perceived status as a free good. Since the early 1990’s, a steady decline in real per capita income has occurred as a consequence of macro-economic structural adjustment reforms in Zimbabwe and periodic droughts. A reasonable hypothesis is that fuelwood will continue to provide a significant energy source for Zimbabwe into the next century. Therefore, this case study is important by identifying analytical methods and data requirements to improve the quality of economic information for policy makers tasked with addressing forest management issues. The methods tested in this case study will be useful to researchers and policy-makers in other developing countries who share similar forestry issues.

The study will build on previous work, especially Crowards (1994), by trying to estimate values of economic depreciation of timber stocks using the more refined approach of Vincent and Hartwick (1997). The main difference in approach is in the valuation of physical stocks by multiplying the net depletion of the resource by an estimate of rent. Most studies use average net price as the measure of rent while Vincent and Hartwick use marginal net price. As the authors show, using average net prices can exacerbate bias in calculating net deprecation values of stocks.

The objectives of this case study are to: