ABSTRACT

This report presents a general overview of forest revenue system formulation, collection and use in the forestry sector in Nigeria. It gives a brief historical background of forest revenues in Nigeria, then describes the forest revenue structure, models for assessing forest charges, types of fees, level of charges and concession arrangements. It looks at how fiscal policies in the sector and policies in other sectors affect sustainable forest management practices. It shows that, despite the importance of the forest resource for the sustenance of the rural population and its economic importance to the whole population, the forestry sector does not contribute sufficiently to the economy of the country. This is because of the weakness of the forest revenue system and the lack of attention paid to revenue generation from non-wood forest products. These problems result in low budgetary allocation to the sector and ineffective revenue sharing amongst all stakeholders. The report shows that the forest revenue system is characterised by low product price levels and inadequate monitoring, which results in widespread tax evasion, illegal logging and waste. The revenue system needs to be reformed to create an enabling environment for sustainable forest management. The report recommends that all stakeholders should be involved in decision-making about forest revenue system formulation, revenue collection and sharing. It also recommends a relaxation of all forms of wood export restrictions and a reorganisation of the forest revenue system.