Uganda has a long history of forest management. Historically, the forestry sector was focused on the management of forests for the profitable production of forest products. However, in recent years, forestry policy has been redefined in line with the broader principles of sustainable forest management. This process is still under way and there is still a need to revise many of the existing policies and legislation to adapt to current circumstances.

A full range of forest charges are used in the forest revenue system in Uganda, including charges on the following: industrial roundwood; wood fuel; processed products; and non-wood forest products. The types of charges used are a mixture of volume-based production fees, ad valorem taxes and simple flat-rate fees for permits to produce, trade and transport products. In most cases, these charges are believed to be well below the true market value of these products.

Forest charges are determined by Forestry Department staff (based on their knowledge of local market conditions), in consultation with others inside and outside the Department. The revision of forest charges is infrequent, but they were recently revised in 2000. Forest revenue is collected by field-staff of the Forestry Department and a number of improvements have been made to the systems for collecting and monitoring charge collection. These changes include: the development of a database of forest revenue collection; better systems for measuring production; pre-payment of some charges; and the use of a mobile task force to monitor and capture illegal production. However, these advances are undermined by the poor terms and conditions of employment for field-staff, which lead to low staff morale, poor performance and, in some cases, suspected collusion and corruption.

Total revenue collection has increased dramatically over the last five years, with the revisions to charges and the introduction of these improved systems. However, total revenue collection is still considered to be well below the potential amount that could be collected. In addition, 40 percent of the revenue collected is now given to local government under the policy of decentralisation. The amounts collected are considered to be insignificant by many in Government and total revenue collection does not cover the costs of the Forestry Department. This may contribute to the current problems of accessing financial resources for forestry development from the central government.

Public sector expenditure on forestry is determined along with expenditure by all other government departments as part of the annual national budget planning exercise. The Forestry Department budget is divided into automatic releases and Appropriation in Aid (AiA). The latter is partly based on the performance of the Forestry Department in terms of revenue collection. In addition to recurrent expenditure, there is also some expenditure on projects, where the Government of Uganda contributes counterpart funding to donor-funded projects in the forestry sector. There are often problems in accessing financial resources and the current rules regarding public expenditure are inflexible, which causes some problems for forest management.

In addition to problems with the current fiscal policies in the sector, there are also a number of policies and regulations in other sectors that restrict the capacity of the forestry administration to implement sustainable forest management. These include policies on decentralisation, control of land, urbanisation and industrialisation, wildlife management and public sector reform.  

A number of improvements to the current situation have been recommended, including raising the forest charges, improving the terms and conditions of staff, providing more resources for monitoring and control and greater collaboration with the private-sector in forestry investment and development. With the transformation of the Forestry Department into the new National Forestry Authority, it is expected that a number of existing policies and legislation will have to be revised to support the new institution. It is hoped that this new self-financing institution will have more flexibility to spend money on urgent priorities in the sector and that the drive for self-financing will encourage and support improved revenue collection in the sector. It is also hoped that this institution will be able to build better partnerships with NGOs and the private-sector, so that performance in the forestry sector can be improved and come closer to the goal of sustainable forest management.