The only “institution” or forestry harvesting company in the Democratic Republic of Congo - FORESCOM - was “privatised” by a process which up until now has not been cleared up. The other institutions are normative specialised services of the Ministry not having autonomy regarding their budget except the FCFC which operates on a budget on order, supplied by two taxes, that is, on the felling permit and the tax on wood exports (logs, sawnwood and veneer). The revenue from these two taxes is paid into a Resident Foreign Currency account (RFC). We will present the 1998 budget of the FRFC having briefly described the procedure in drafting it.
The 1999 budget forecast was drafted on the basis of the following points:
1. Ministerial decree number 13/CAB/MIN/ECNT/97 of 28 February 1997, setting taxes and the methods of collection of FRFC dues. For the 1999 year, the rates set were the following:
- Dues on felling permits: USD 2.00/ha
- Dues on
wood exports: logs - 4.00% of FOB amount
sawnwood - 2.00% of FOB
amount
veneer - 1.50% of FOB amount
2. The average value of currencies in relation to the Congolese franc are rated at: USD 1.00 = Fc 3.50; and BEF 1.00 = Fc 0.10.
3. For the production statistics for 1994, 1995, 1996 and 1997, the working hypothesis used is acknowledging that forestry companies will be able to maintain for 1999 their average level of production for the years 1997, 1995, 1996 and 1997. The forestry surface area for harvesting in 1999 is thus estimated at 70,000 ha. The dues on wood harvesting are calculated on the basis of the annual average of revenue generated by forestry companies in 1994, 1995, 1996 and 1997.
The situation of this revenue can be summarised as follows:
Product |
Amount |
Logs |
BEF 17,889,349 |
Sawnwood |
BEF 4,969,264 |
Veneer |
BEF 1,987,705 |
Total |
BEF 24,846,318 |
The forecast for 1999 for the FRFC are presented as: dues on felling permits = Fc 490,000; and dues on wood exports = Fc 2,484,632.
Revenue aspect. There is a fund that was specially created for forestry, it is the Fund for the Reconstitution of Forestry Capital (FRFC) which was to support twelve projects of reforestation and nine forestry services of the supervisory ministry for forestry. Its activities are today paralysed by the war that caused a ceasing of forestry activities for the most part of big wood production companies.
Budget headings |
1998 forecast (NZ) |
1999 forecast (Fc) |
Dues on felling permit |
15,620,000,000 |
490,000 |
Dues ad valorem (export) |
||
- Logs (4.00%) |
61,564,783,678 |
1,788,935 |
- Sawnwood (2.00%) |
17,179,894,022 |
498,926 |
- Veneer (1.50%) |
7,305,281,896 |
198,771 |
Subtotal |
86,049,959,594 |
2,484,632 |
TOTAL |
101,669,959,594 |
2,974,632 |
Note; Fc 1.00 = NZ 3,000,000; USD 1.00 = Fc 1.50.
Spending aspect. In conformity with texts governing the use of FRFC loans, the revenue is used to finance projects on the one hand, and on the other, the operating of the FRFC secretariat in the following percentages:
- Financing of
projects:
70% of the budget Fc 2,082,242
- Operating of FRFC
secretariat: 30% of budget Fc 892,330
- Total
budget in
1999 Fc 2,974,632
Spending affected by the financing of these projects is broken down as follows:
Payments |
42.2% |
Operating costs |
30.0% |
Investment (equipment) |
19.8% |
Total |
100.0% |
Public spending on investment for the 2000 tax year was Fc 5,196,640,822 or USD 208,000,000 and Fc 272,568,000 or USD 10,902,720 of expenditure allocated to forestry, that is 5% of capital investment (see Table 9).
Regarding the operating budget estimated at Fc 956,073,378 or USD 38,242,951, an amount of Fc 3,902,200 or USD 156,088 or 0.4% was allocated to forestry (see Table 10).
1999 budget |
2000 budget | |
Presidency |
27,713,686 |
72,953,000 |
TOTAL |
400,896,119 |
5,196,640,822 |
Source: Congolese State budget for the 2000 tax year, Table number 44. Note; the Budget is expressed in Congolese Francs (Fc); USD 1.00 = Fc 25 (Year of reference: 2000).
Ministries |
Amount (Fc) |
% |
Ministry for Land Affairs, the Environment,
Fishing and Forestry |
3,902,200 952,171,178 |
0.04 99.96 |
TOTAL |
956,073,378 |
100.00 |
Source: Congolese State budget for the 2000 tax year, Table number 38.
Since the first pillaging in 1991 which put an end to structural cooperation with sponsors, that is more than ten years ago, the Democratic Republic of Congo has no longer received foreign aid destined for forestry, with the exception of the UNDP and FAO. They financed the holding of two conferences in May 2000 on forestry policy in the Democratic Republic of Congo.
Congolese law does not cater for this type of subsidy and there are practically no companies or individuals operating in the sector of forestry management.
The only forestry company of the Democratic Republic of Congo (FORESCOM) was privatised following the rupture with Canadian cooperation.