REVENUE COLLECTION AND DISTRIBUTION
Total collection and distribution of forest charges
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 Average charges for forest products and services in Nigeria in 2000
Forest product/service |
Unit |
Average forest charge |
|
in Naira |
in US$ |
||
Timber |
|||
Unit Area charges |
per hectare |
200 - 600 |
1.72 - 5.17 |
Stumpage |
per tree |
50 - 420 |
0.43 - 3.62 |
OTV Grade 1 species |
per cubic foot |
94.50 |
0.84 |
Grade 2 species |
per cubic foot |
65.50 |
0.58 |
Grade 3 species |
per cubic foot |
51.70 |
0.46 |
Poles |
per pole |
150 - 180 |
1.29 - 1.55 |
Fuelwood |
per cubic metre |
80 |
0.69 |
Non-wood and minor forest products (e.g. ropes, leaves, canes, etc.) |
per month |
100 - 300 |
0.86 - 2.59 |
Forest industry licences |
|||
Bandmill |
per unit |
10,000 |
86.21 |
Benchmill |
per unit |
5,000 |
43.10 |
Circular benchmill |
per unit |
2,500 |
21.55 |
Sawmill |
per unit |
2,500 |
21.55 |
Planing machine |
per unit |
2,500 |
21.55 |
Timber preservation/seasoning |
per unit |
2,500 |
21.55 |
Forest recreation gate fees (e.g. in zoos, botanical gardens) |
per person |
5 - 10 |
0.04 - 0.09 |
Hunting of animals |
per animal |
20 - 5,000 |
0.17 - 43.10 |
Source: data collected from the field.
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.
Table 18 Total forest revenue collection in selected states in Nigeria 1991 – 1999 (in thousand Naira)
States |
Year |
||||||||
1991 |
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
|
Abia |
n.a. |
219 |
131 |
161 |
395 |
301 |
239 |
379 |
396 |
Adamawa |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
Akwa Ibom |
277 |
230 |
204 |
276 |
728 |
346 |
553 |
672 |
890 |
Anambra |
n.a. |
159 |
270 |
212 |
287 |
250 |
192 |
379 |
353 |
Bauchi |
15 |
21 |
20 |
27 |
5 |
8 |
23 |
5 |
21 |
Bayelsa |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
141 |
117 |
144 |
Benue |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
369 |
625 |
781 |
1,094 |
Borno |
801 |
864 |
1,061 |
1,118 |
1,502 |
1,804 |
1,991 |
8,247 |
2,745 |
Cross River |
2,000 |
2,000 |
2,000 |
8,000 |
14,000 |
11,000 |
14,000 |
14,000 |
13,000 |
Delta |
n.a. |
1,882 |
1,756 |
1,654 |
1,478 |
1,539 |
1,426 |
966 |
1,571 |
Ebonyi |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
71 |
115 |
302 |
Edo |
1,819 |
4,892 |
5,535 |
16,007 |
25,439 |
11,802 |
71,481 |
25,955 |
30,650 |
Ekiti |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
7,907 |
20,836 |
13,009 |
17,717 |
Enugu |
n.a. |
72 |
74 |
137 |
1,555 |
94 |
252 |
214 |
350 |
Gombe |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
Imo |
n.a. |
183 |
422 |
428 |
584 |
520 |
503 |
469 |
632 |
Jigawa |
n.a. |
n.a. |
n.a. |
30 |
33 |
27 |
41 |
52 |
47 |
Kaduna |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
Kano |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Katsina |
36 |
43 |
76 |
98 |
120 |
342 |
336 |
105 |
494 |
Kebbi |
n.a. |
25 |
2 |
3 |
9 |
2 |
93 |
837 |
214 |
Kogi |
n.a. |
1,500 |
1,100 |
4,970 |
6,560 |
3,000 |
6,500 |
7,540 |
4,730 |
Kwara |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
Lagos |
83 |
n.a. |
n.a. |
414 |
793 |
1,052 |
899 |
806 |
2,360 |
Nasarawa |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
Niger |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
Ogun |
n.a. |
n.a. |
2,177 |
4,057 |
9,448 |
14,684 |
44,895 |
34,609 |
41,329 |
Ondo |
101,016 |
76,219 |
72,009 |
96,441 |
101,016 |
76,009 |
72,009 |
96,441 |
86,412 |
Osun |
183 |
2,008 |
3,974 |
5,559 |
30,071 |
13,878 |
52,228 |
63,218 |
35,714 |
Oyo |
990 |
618 |
1,468 |
1,880 |
1,892 |
12,469 |
18,823 |
448 |
5,011 |
Plateau |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
Rivers |
n.a. |
n.a. |
n.a. |
94 |
258 |
101 |
118 |
109 |
n.a. |
Sokoto |
298 |
332 |
378 |
437 |
463 |
353 |
475 |
568 |
484 |
Taraba |
9 |
20 |
19 |
22 |
34 |
72 |
208 |
128 |
277 |
Yobe |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
Zamfara |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
55 |
57 |
n.a. |
FCT |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
n.a. |
Total |
107,526 |
91,288 |
92,674 |
142,026 |
196,670 |
157,928 |
309,014 |
270,228 |
246,936 |
(US$ ‘000) |
(10,851) |
(5,277) |
(4,203) |
(6,488) |
(6,226) |
(1,929) |
(3,760) |
(3,125) |
(2,572) |
Source: data collected from the field.
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).
Figure 5 Average annual revenue collection by state in Nigeria over the period 1991 - 2000
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.
Table 19 The average share of total forest revenues collected from various sources over 1991-1999
Revenue sources |
Share of revenue (in percent) |
Timber charges(including charges on sawnwood) |
62.80 |
Pole charges (e.g. for electricity and telephone poles) |
17.69 |
Fuelwood charges |
3.50 |
Charges on non-timber and minor forest products (except fuelwood) |
13.17 |
Penalties for forest offences |
0.09 |
Forest industry licence fees |
2.26 |
Forest recreation fees (e.g. entry fees for zoos and botanical gardens) |
0.49 |
Total |
100.00 |
Source: data collected from the field.
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.
Table 20 Models of forest revenue sharing in selected states in Nigeria
States |
Revenue sharing models |
Edo |
State Government 55.0% Local Government 25.0% Forestry Fund 20.0% |
Cross River |
State Government 80.0% Local Communities 20.0% |
Ondo and Ekiti |
State Government 75.0% Forestry Fund 25.0% |
Oyo and Osun |
State Government 58.3% Forestry Fund 25.0% Local Government 16.7% |
Ogun |
State Government 50.0% Forestry Fund 25.0% Local Communities 25.0% |
Kaduna (and some other states in the savannah forest zone) |
State Government 40.0% Local Communities 60.0% |
Source: data collected from the field.