GOVERNMENT EXPENDITURE ON FORESTRY

Public funding for forestry development relies entirely on annual allocations from government. The State Departments of Forestry are allocated funds each year to cover salary and wages as well as other operational of overhead costs. The level of funds allocated to forestry across the country is very low. In some states, it is as low as 1 percent of the annual state budget. In the Federal Ministry of Agriculture, sometimes only about 2 - 4 percent of the annual allocation of public funds to the Ministry goes to the Forestry Department.

In recent years, federal and state governments have been unable to meet their financial requirements for forestry development due to the low level of funding. This contrasts to earlier years, when states were able to cope because of assistance from foreign or external loans. Examples of such assistance include: the World Bank Forestry II Project; African Development Bank forestry development programmes; and the EEC/FGN Katsina Afforestation Project. Most of this assistance has either terminated or is about to terminate.

The Nigerian Government has a number of institutions implementing forestry projects and programmes. Such institutions include: the Federal Department of Forestry; the Forestry Research Institute of Nigeria; the forestry departments of various universities; and various schools of forestry and vocational training centres.

Each of these institutions is charged with specific responsibilities for implementing government forestry policy. For example, the Federal Department of Forestry has the function of consolidating and expanding the forest estate in Nigeria and managing the estate in accordance with the principles of sustainable yield. One of the ways in which these functions are implemented is through specific projects, such as forest plantation development projects and the project on the production of long-fibre wood for the pulp and paper industry. These projects are implemented through the state forestry services, by transferring funds to them through the Department's field offices in the states. Implementation of such projects is often spread over a long period spanning many years and, because some of these projects are currently on line, they are currently funded every year by government.

The Ministry of Finance has the responsibility of preparing the national budget based on the activities of the government in all sectors of the economy. This budget is presented to the National Assembly for approval and, when it is approved, it is presented as an Appropriation Bill by the National Assembly for assent by the President. Thereafter, the budget is allocated and distributed to each of the various ministries and departments, which can then start to spend this money.

Historically, public funding of forestry projects and programmes in Nigeria has been inadequate and untimely at both the level of the Federal Government and state governments. As Table 21 shows, funding has been particularly poor over the last ten years and has reached levels of only between 1 and 8 percent of the total federal budget for agriculture (excluding provisions for fertiliser). This ugly situation has meant that it has not been possible to adequately execute and implemented planned programmes in the forestry sector. Hence, this situation has had a detrimental impact on the sustainable management of the forest estate.

As stated earlier in the preceding sections, forest revenues come from the production of tangible and intangible forest products. These revenues take the form of tariffs, charges, levies and taxes However, the existing forest products prices (tariffs) are generally unrealistically low and bear little resemblance to the cost of renewing the forest resource. In addition to this, many of the other goods and services produced in Nigeria’s forests are also undervalued (or not valued at all). Thus, the contribution of the forestry sector to the Gross Domestic Product (GDP) is dismally low and appears insignificant when compared with other sectors such as petroleum products.

The establishment of Forestry Trust Funds (FTFs) has not helped matters, because revenues accruing into such funds are never retained and ploughed back into the forestry sector for forestry development as originally intended. Rather, in most cases, state governments have utilised these funds for other purposes (e.g. payment of salaries in the public sector generally and expenditure on other development projects). This was particularly a problem during the era of military rule in Nigeria.

Forestry development efforts in Nigeria were, at first, geared towards forest reservation. This period was followed by a period of uncontrolled exploitation of timber resources because of high demand for forest products. Considerable pressure was exerted on the forest resource during this period. In addition to forest exploitation, increased population pressure in the countryside also contributed to the already worsening situation, by increasing demand for farmland, leading to further forest depletion. However, since 1970, technical assistance has been received on a number of occasions, with the aim of assisting the country to increase its forest estate and manage the environment in a more sustainable way. Some of these assistance projects are briefly described below:

The Food and Agriculture Organization (FAO) and United Nations Development Programme (UNDP) sponsored a large scale indicative forest inventory between 1974 and 1976. This was a success and the report of the project has been a good source of data for forestry development in Nigeria.

In the early 1970’s, the Finish government and FAO gave a grant to build a sawmill and forest utilisation centre at Benin City in Nigeria.

The World Bank financed, through a loan of US$ 31 million, the "Forestry I Project" between 1980 and 1984 in Ogun and Ondo states. The objective of the project was to improve industrial wood production and the project was a huge success.

The N 13.56 million Katsina State Afforestation Project (KSAP) was funded by the European Economic Community (ECC), now European Union (EU), between 1987 and 1993. The project did very well in achieving its objectives.

Between 1987 and 1996, the World Bank financed the US$ 71.0 million "Forestry II Programme" in Nigeria. The Project was implemented in 16 states in the country. The major objectives were to strengthen the structural base of the sector, stabilise soil conditions in the semi-arid and arid North and increase industrial wood supply. This project was completed on June 30, 1996 and the afforestation component was judged as one of the most successful in the world (receiving the "Saving the Dryland" award from the United Nations Environment Programme (UNEP) and the International Fund for Agricultural Development (IFAD)). Broadly speaking, the programme was able to achieve the following:

Improved forest policy, mainly in the following areas: forest revenues; integration of fruit trees into farming systems; increased private-sector participation in forestry and wood based industries; and the establishment of Forestry Trust Funds to sustain government financing of forestry project(s).

Improvements in planning and policy formulation capability, forest management, extension, monitoring and financial management (as demonstrated by the quality of the project’s outputs).

Sensitisation of individuals and communities to take responsibility for tree growing and improved forest management. This was achieved through the involvement of over 350,000 farm families in social forestry activities.

Improved plantation development and management of about 40,000 hectares of forest plantations.

In 1991, Nigeria received a grant of US$ 690,000 from UNDP, to develop the Nigerian Forestry Action Plan (NFAP).

Form 1994 to 1996, FAO provided US$ 155,000 of technical assistance towards the control of Scale insect infestation on Neem trees in Nigeria. The project’s objective was to develop an integrated pest management system by introducing natural enemies of the Scale insect, using exotic germplasm for evaluation of tolerance or resistance to breeding by the Oriental Scale insect and establishing a long-term integrated pest management strategy in Nigeria. Through the project, and Infestation Survey Manual was developed.

From 1992 to 1997, the World Bank provided a US$ 3.5 million loan for the Environmental Management Project. This project was implemented nationwide and, through the use of remote sensing and GIS technology, resulted in the production of up-to-date land-use and vegetation maps for the country, which provided useful information and data for land-use planning.

Also, between 1993 and 1998, the International Bank for Reconstruction and Development (IBRD) sponsored, through a grant, an Environmental Management Project, which had forest reserve management as a component. The project component has been successfully concluded.

In 1986, the African Development Bank (ADB) made a loan of UA 69.55 million to Nigeria for forest development in Ogun and Ondo states (the Forestry Development Project or FDP). Projects under this loan established more than 6,000 hectares of Gmelina plantations to increase the raw material base for the Iwopin Pulp and Paper Mill. Each of the project areas was also expected to establish 600 hectares of trial plots of indigenous species and pine species to supplement the supply of sawn timber, poles and fuelwood from the 50,000+ hectares of existing Gmelina plantations in the two states. The projects, which had wood conversion and utilisation as one of their main components, started in 1989 after some delay and were to end in 1992. However, because the projects started late, there was some delay in equipment procurement through international competitive bidding, so the projects are still on-going and have been extended to December 2000.

In 1995, the ADB gave a grant of UA 2.717 million to Nigeria for the Forest Resources Study (FRS). Essentially, the Forest Resources Study was to survey the forest resources of Nigeria and produce a database for forest management in the country. The project has been successful. The study also identified priority projects that would assist the country in sustainable natural resources management. Other results of this project included the production of forest resources inventory data for 28 out of the 36 states and the provision of a Forest Information System (FIS) for the country.

Recently, a Micro-Watershed and Environmental Management Project has been developed. This is still at the development stage and will depend upon the success of the efforts outlined above. This project, which is multi-sectoral and community-driven, is based on the concept of natural resources management. The project will be financed by both credit from the International Development Association (IDA) and funds from the Global Environmental Facility (GEF). The IDA financed component will focus on community-driven investment and has components for the review of policy and legislation, institutional and capacity building and communications outreach. The GEF component will focus on the management of two national parks and their buffer zones and other areas identified as being of high biodiversity. The project is due for appraisal in February 2001 and is anticipated to cost about US$ 100 million, of which GEF has approved US 15 million.

Table 22 provides a summary of all of the major donor assisted projects in the forestry sector in Nigeria since 1987.

The Forestry Research Institute of Nigeria (FRIN) has the sole mandate to undertake research into any forestry related subject in the country. Funding of this agency, which has just been transferred from the Federal Ministry of Agriculture and Natural Resources, is also through the central vote of government (i.e. it is directly funded by the Federal Government of Nigeria). Most often, budget allocations to this agency are grossly inadequate to meet the research needed in the forestry sector. These allocations are supposed to cover the following basic research activities:

identification and control of forest pests and diseases;

improvement of growth and yield potential of indigenous and exotic tree species;

identification of the potential to integrate trees into farming systems and the potential for natural regeneration; and

research into specific needs as may be identified by various forestry training institutions.

There are three main categories of forestry training institutions in Nigeria, namely:

the professional training institutions (i.e. the university forestry departments);

the technical training institutions (i.e. the colleges of forestry and colleges of wildlife management); and

the vocational staff training institutes, which train semi-skilled and unskilled forestry personnel.

The above institutions are funded from a mixture of federal and state budget allocations and are also poorly funded. Accurate information about the funding of these research and educational institutions could not be obtained for this country report. However, it should be noted that these institutions have survived for many years and the educational institutions have trained many forestry personnel over the past 50 to 60 years.

Forest management in Nigeria has been in the hands of the government for over a century. This has resulted in uncontrolled deforestation of the natural forest, encroachment by farmers practising shifting agriculture and desertification at an alarming rate. There are no incentives for stakeholders to invest in sustainable forest management and this has not helped matters. The only private-sector involvement in forestry development is in the forest processing sector (sawmills, wood based panel factories and other wood producers) and activities in this sector are fairly modest and focused on extraction rather than management. Only a few hectares of forest plantations have been established by private firms and individuals.

There are the three major pulp and paper producers in Nigeria, namely: Iwopin; Jebba; and Oku-Iboku. These are all government controlled companies that are located in the high forest zone. Unfortunately, these companies have been poorly funded and have been closed down for over four years, due to lack of operational funds. The current administration in Nigeria has begun to plan the privatisation of these companies and details of this are still being worked out.