In Kenya, forests cover about 1.25 million ha., comprising 79,000 ha (plantation forests) and 1.17 million ha. (Indigenous forests). In 2004, this represented approximately 1.7 per cent of the total land area. Plantation forests supply round wood, non-timber forest products and raw material for reconstituted wood products, pulp and paper. The forest resource contributes over Kshs. 90 billion to the economy (over 19 per cent) of the Kenyan GDP.

A number of problems cloud the forest sector. They include: the on and off banning of the ‘shamba’ system, replanting backlogs and excisions from plantations. Royalties paid to the forest department are very low compared to the value of roundwood in international markets. In addition, there is inefficiency in wood industry as conversion and recovery rates are as low as 20 per cent.

When the Kenya Government closed many sawmills citing insufficient raw materials, their number reduced from 221 (in 1995) to less than 171 in the Rift Valley Province. Annual national roundwood deficit is estimated at over 100,000 M3 and has been forecasted to increase to up to 1 million M3. There is a ban on timber harvesting in all government forests. It is clear that conventional management systems (public ownership, concessions, ‘State Forestry’) has not worked well in Kenya.

Many sub-Saharan Africa countries face major difficulties in sustaining their once dynamic forest plantation programs and are taking steps to privatise and/or commercialize them. Privatisation or commercialization appears to be the logical option out of the present stagnation with plantation programs. A few countries in the world have already made commendable progress in that direction.

Forests cover 8.0 million ha, or 29 per cent of New Zealand’s land area. Of this, 6.4 million ha are indigenous and 1.6 million ha are planted forests. Forestry contributes 5.3 per cent of New Zealand’s national income. The forest resource was commercialized as a way of unlocking New Zealand’s enormous economic potential. The resource is owned by different actors. The economic potential involves increasing New Zealand’s available wood supply by 80 per cent from 16.4 million M3 realized in 1990’s to a projected 30 million M3 by 2010; increasing to 2.5 million hectares, or 9 per cent of New Zealand’s total land area; creating new jobs to an additional 35, 000 people and contributing more than 10 per cent to New Zealand’s national income.

The commercialization of forestry in Romania was started in 1991 in phases. Upto 10 ha was restituted to individuals and 30 ha to churches. In 2004, total forest areas restituted amounted to about 2.9 million ha, which is about half of the total forest area in Romania.

In South Africa, commercialization of forestry was done in stages changing forest ownership from public sector to private. Twenty per cent of the State’s plantations have been transferred to private sector consortia (Well-established South African forestry companies are the majority shareholders); eighteen per cent of the State’s plantations have been earmarked for conversion to alternative land uses, including nature conservation and land reform. A further 45% of the State’s plantation estate is currently subject to disposal tender processes. It is expected that within 3 years, all the State’s plantations will either be transferred to private sector management or subjected to land-use conversion processes. Due to commercialization, forestry and associated processing industries generate US$ 1 billion annually or 1.5% of GDP which is an improvement by 50%  

Institutional requirements for forestry sector commercialization in Kenya

Credit institutions should be strengthened with appropriate legislative frameworks to allow for credit facilities for long term investments of at least one rotation of tree crops.  Commercial institutions should be established to facilitate: Procurement of inputs, supplies and equipments and marketing the outputs. Training institutions to offer training in seed collection techniques, planting, tending, logging and sawing should be increased. The current land policy needs revision in order to allow leasing out land to forest entrepreneurs interested in investing in forestry. Forest Extension Services should be revitalized to assist forest owners implement forest management plans and government policies.

There should be an enabling political environment and goodwill to enable the forest land owners and investors participate fully in management of the resource. The Government role after privatization should be limited to creating an enabling environment for other players to manage the forests and regulating their actions for national interest. The Forests Act 2005 applies to all forests and woodlands on state, local authority and private land. This new law expects forest management to be undertaken by all the stakeholders in the forest sector, namely, the Kenya Forest Service, local authorities, the private sector, local communities, non-governmental organizations and farmers.

Expected benefits from privatization of forest resources

Communities adjacent to the forest would derive livelihood from the forests. There would be improved efficiency of forest processing industries by increasing effective competition for raw material and consolidation of forest resource ownership, leading to higher efficiency and profit margins due to economies of scale. Apart from reduction of long term public debt incurred from maintaining inefficient wood processing firms, investors would make long term planning with the availability of raw material

Conclusion

With a centrally controlled forestry in Kenya, the full benefits of forestry have not been realized although it accounted for 19% of the total GDP. With the advent of the Forests Act 2005, allowing increased participation of stakeholders in forest management and commercialization of the sector, it will be possible for the productivity and overall contribution to the Kenyan economy to increase by about 50% as seen in the forecast case of New Zealand and South Africa. However, for it to be achievable, it will be important to implement commercialization in phases.

By P.O. Odwori, L. Etiegni and K. Senelwa

Moi University