DISCUSSION AND CONCLUSIONS

Efficiency of the tax system for forestry

The following indicators allow the efficiency of the current tax system for forestry to be evaluated:

The revenue generated by the customs service from levies on the import and export of wood products. This revenue was more than 1.2 billion FCFA in 1999 (see Table 18 and Table 19).

Investment in forest development using the management funds generated from taxes on the transport and commercialisation of wood by rural markets. This contribution amounts to an average of 55 million FCFA per year (see Table 16, Table 17 and Table 25) and will increase with the setting up of new rural wood markets.

Revenue and turnover from local management structures in their selling of wood in rural wood markets. This total figure is currently 1 billion FCFA (see Table 15) and this is also an efficient means of combating poverty.

The contribution of forestry to GNP, which was 4% in 1990, is increasing and the aim for 2004 is to increase this to 8%.

The state’s financial aid for investment in the most promising sectors of forestry production (gum trees, trees used for fodder and food etc). This aid rose from 1 million FCFA in 1991 to 1.4 billion FCFA in 2001 (see Table 21).

The obvious will of communities on the ground to take part in the management and development of their own forest resources and the will of the state to persevere in decentralising forestry resources.

The interest in the sector shown by new financing from donors.

The population’s tendency to value standing trees.

Therefore, in the context of implementing the new forestry policy, a progressive increase in taxes on uncontrolled harvesting is envisaged. Moreover, this will contribute to an increase in state revenue.

Efficiency of monitoring

It is clearly apparent that the tax system is confronted with a "legal form of fraud" which has repercussions not only for revenue collection but also for the assessment of the efficiency of monitoring. This is encouraged by certain insufficiencies such as:

the lack of operating capital for the Water and Forestry Service;

the very low salary of monitoring personnel;

the incorrect interpretation of laws by certain members of staff; and

the non-compliance with laws by certain categories of the population (e.g. the violation of regulations by the army, the overloading of certain types of vehicles, etc.).

The monitoring rate was 11% from 1985 until 1990. Today it is only 30%. An example of the impact of this is that it is estimated that there is a 20% difference between the volume of wood taxed and the volume really transported. Current legislation ties the hands of the personnel responsible for monitoring and often leads to this unfavourable situation, in spite of the provision of efficient means of communication (such as walkie-talkies) that permit better monitoring operations to crack down on offenders.

The administration responsible for forestry continues to believe that the main way to increase revenue collection effectively is to improve the efficiency of monitoring operations examining wood entering and leaving the country or big towns. Thus, it is necessary to:

oversee the conditions for harvesting and application of guidelines and directives contained in the Framework for Supply Guidelines;

limit the reduction in the resource potential; and

cut down on fraud.

This will justify the increase in forestry revenue. One of the major goals that is currently being fixed for forestry policy is to increase the level of monitoring of wood movement to 80% at the entrance to large urban centres. The drafting and revision of certain laws can also be the occasion for implementing a profit-sharing scheme with, as far as possible, deductions at source, which might provide incentives for staff and to direct these deductions to the rural wood markets.

Follow-up of forestry revenue

A plan of action has been put in place to follow up recommended changes to the forest revenue system. However, it is not completely watertight, in spite of activities already implemented (computerisation, paying-in slips) and undertaken (regular rounds by civil servants, co-ordination with the public revenue department). Unfortunately, information is not recorded and collected regularly, payments are not made in time and the follow-up of accounts is anarchical. It is, therefore, still necessary to spend a considerable amount of time and energy in order to obtain information that should be readily available to the different services concerned. It is often difficult to interpret certain tables to assess trends. Indeed, in certain cases information is missing (e.g. information on government regulations).

There are other measures that should be adopted. For example, in terms of expenditure, both the central and decentralised levels of administration should draft work plans and budgets on the basis of revenue forecasts. This will allow the prioritisation of choices and should facilitate the allocation of expenditure to regions depending on the availability of funds. In addition, difficulties exist for the public revenue department in terms of releasing committed funds. On the basis of an annual and quarterly budgets, the ministry responsible for forestry should be able to release funds corresponding to planned expenditure from the Treasury, deposit them in an account in a commercial bank and thus facilitate disbursements.

With the new organisation in place, the forestry management fund was set up at different levels. These funds should contribute to sustainable forest development in harvesting areas. The characteristics and lessons learned to date from the operation of these funds reveal several effects on sustainable forest development:

Most of the funds come from levies in the form of taxes, fees or subsides paid punctually by a partner (in the case of the Domestic Energy Project). Taxes can benefit the forestry administration with a regular flow of financial resources. The initial contribution of a partner or donor allows activities to be implemented quickly while waiting for the tax mechanisms to be permanently fixed. The case of funding for the Domestic Energy Project, phase II is quite significant.

Generally speaking, accounts are held in current accounts or special accounts of the public revenue department and are managed by the central administrative offices responsible for forestry (e.g. Accounts 3001 and 3002). This allows funds intended for the support of sustainable forest development to be mobilised more easily than general funds in the public revenue department. The procedure for payment from general funds is long and cumbersome and can, thus, bring about slowness and delays in the execution of programmes for forestry development.

Public finances are currently the best means for the state to intervene in the management and development of forestry. Budgetary procedures are carried out in accordance with the fundamental laws and regulations outlined below:

Law number 61-32 of 19 July 1961, pertaining to the finance laws;

Law number 90-10 of 13 June 1990, relative to the Supreme Court;

Ordinance number 84-34 of 27 September 1984 amending law number 61-32 of July 1961;

Ordinance number 85-32 of 14 November 1985 instituting the public market code;

Decree number 61-174 of 24 August 1961, concerning the application of the management system of the national budget;

Decree number 68-75 of 21 June 1968, fixing the modes of government spending;

Decree number 73-86/MF/ASN of 9 August 1973, concerning the organisation of the public revenue department;

Decree number 93-45 of 12 March 1993, bearing the general regulations for public accounting;

Decree number 93-176/PRN/MF of 3 December 1998 pertaining to the organisation and attributions of financial monitoring;

Decree number 93-187/PRN/MFRE/P of 9 July 1998, bearing amendments to decree number 68-75 of 21 June 1968, fixing the modes of government spending; and

Instruction 051/MF of 6 September 1967 on the accounting of public spending.

Although the importance of forestry has been affirmed in all national projects and programmes, it should be noted that public investment in forestry development remains low compared with other sectors like agriculture. For example, it scarcely represents a little more than 1% of total government spending.

The efforts to finance rural development have not yet yielded the expected results. Local development and management funds for forestry resources, placed at the disposition of community structures, have not been effective.

Thus, both for the central administration and communities, the procedure for carrying out budgetary spending as planned (and as outlined above in legal and institutional documents) in practice comes up against technical and human obstacles. Challenges include the diversity of operations and waste and these render and these make financial planning and authorisation uncertain. Likewise, through the structures in place for spending, there are gaps, notably in the non-application of certain laws that have become outmoded or laws that existed but have never been enforced. The example could be quoted of the non-functioning of the National Audit Office which was given the task of monitoring over time the decisions related to budget spending and, by not functioning, has led to a breakdown of budgetary discipline. For example, since 1981, no report from the audit office has been submitted to Parliament as envisaged under the law.

There are other factors that could be added to these constraints:

The fact that Niger is not a country that transforms and exports forestry products.

Institutional bureaucracy for projects, which makes it difficult to mobilise the resources donated to the country. This is the case of the National Plan for the Environment for Durable Development (NPEDD), for the World Environment Fund (WEF) and of the Natural Resources Management Project (NRMP), which are respectively under the Ministry of Planning and of the Ministry for Rural Development.

The reduction in the state’s presence in the production, commercialisation and transport of forestry products has already begun. This is continuing today in relation to woodfuel products. In fact, the administration should focus on information, promoting awareness, monitoring and putting into place legal and regulatory conditions pertaining to non-ligneous wood products.

A low level of participation on the part of territorial communities in the development of the forestry sector. This concerns a plan of action devised by technical services in the form of cards for recording operations. Under decentralisation, territorial communities will have their own forest resources and will be expected to make greater investments to benefit all.

The absence of private businesses – In spite of new regulations on the transport and commercialisation of wood products, private businesses are slow in setting up. There is rarely any investment in gum tree plantations and the transport of woodfuel. The production of gum arabic, which could be promising, is currently discouraged given the price of gum on the international market. Woodfuel is also transported by quite dilapidated means of transport that can only carry small quantities of wood.

Rural organisations are often very informal. There are currently a certain number of laws pertaining to the creation of rural organisations. These are laws on associations or rural bodies with a co-operative and mutualistic outlook. Therefore, the list of rural organisations was lengthened through, for example, the order concerning the sale and transport of woodfuel and the organisations in the framework of the management of soils. On this account, they assume, partially or entirely, certain responsibilities devolved to communities or to rural administration. Today unfortunately, there is no official document governing the statutes of these organisations.

Guidelines on the organisation of networks

The low price of wood does not encourage consumers to save wood and the increasing demand together with the growing urban population discourages sustainable forest management policies. The price of the most expensive wood in rural wood markets compared to the price for uncontrolled harvesting does not encourage seller-hauliers to move towards zones under development. One of the most effective measures to combat this perception of the main actors in the wood network would be to increase taxes on systems of uncontrolled harvesting to make wood more expensive. However, this often provokes heated responses from the trade unions representing wood harvesters and it would be a very difficult measure for the forestry administration to take.

Today, it is more feasible to increase the monitoring rate, to assure that the collection of taxes on harvesting and sale of wood is properly enforced. This would allow all levels of the administration responsible for forestry to meet their tasks of autonomously monitoring and following up harvesting in forest areas.

Guidelines on the financing of the forestry sector

Although it certainly presents some advantages for the easy and durable financing of forest development, the use of management funds has led to some problems that hinder the successful operation of the sector:

The lack of clarity in the aims of these funds (the case of management funds for LMS and communities) as well as the lack of legislation, often do not limit these funds to be totally dedicated to the realisation of their goals. Thus, it has been noted that these different funds are under-utilised and have served to finance operating expenditure to the detriment of activities on the ground.

In many cases, the situation in the public revenue department is often characterised by an absence of liquidity and this makes actual payment from the funds difficult.

With regard to funds allocated by the state, legislation for releasing the funds undergo delays in being passed and published, thus making it impossible to benefit from the resources expected.

Therefore, the systems for monitoring these funds, as well as the production of financial statement of accounts, are practically non-existent.

Finally, the mobilisation of planned resources often suffers from difficulties in payment and repayment. The services responsible for their payment are either not sufficiently numerous or they have not enough means at their disposal.

In terms of the outlook for forest finances, the financing and management of forests will be carried out though the setting up of the "National Fund for the Environment" (NFE), as set out in law number 98-56 of 29 December 1998 pertaining to the management of the environment. The NFE is not yet operational but will be the outcome of a long process, both world-wide and nation-wide.