In summary, a comparison of forest revenue (Table 4 to Table 7) and expenditure (Table 9 to Table 12) shows that DoF spends much more on forestry than it collects in revenue from the sector. However, this is only based on the data that is readily available and it does not include some revenue from the sector (especially revenue from activities related to wildlife).
At present, there is no comprehensive and unified forest revenue system and a lot of work still needs to be carried out to establish such a system. However, the DoF has established an electronic forest permit database, which is important to keep track of revenues accruing through the issue of permits.
In addition, the DoF and other related agencies responsible for collecting forestry sector revenue are not yet well co-ordinated in this endeavour. Each institution collects revenue independently, it is not known how the data is analysed and disseminated and some institutions are reluctant to divulge fiscal data. Furthermore, the costs of collection versus the amounts of revenue collected are currently not unknown. Therefore, a more mutually beneficial and consistent approach is clearly needed.
One possibility to improve information would be to establish a sector-based central revenue database system (e.g. located in DoF), whereby other institutions involved in the collection of revenue in the forest sector would regularly supply data according to agreed formats. A committee of the stakeholders could be formed to workout the modalities of such a system.
At this stage, in the absence of a comprehensive study to assess revenue collection in the forestry sector, it is not possible to quantify avoidance or the evasion of charges. However, intuitively, it is suspected that there could be some avoidance of charges, as the number of DoF staff is not adequate on the ground to stop all charge avoidance and evasion.
Revenue from import and export charges is probably the most reliable revenue base, because custom controls at border points are very effective. However, the data on forest product import charges is not recorded in a format that allows easy retrieval and regular monitoring.
It certainly would be feasible to collect more revenue from the forestry sector through more efficient charge collection mechanisms. This would entail collaboration with other forestry related government agencies (such as agricultural extension) to increase the number of staff issuing permits and checking on people avoiding paying charges.
Suggestions or recommendations for improvements in the efficiency of charge collection and the total amount of charge collection could include the following:
§ levying taxes and royalties on wood carvers;
§ introducing realistic farm inspection costs;
§ charging higher tariffs on seedlings sold from nurseries (both private and DoF);
§ charging higher import tariffs;
§ charging higher taxes on exports of wood products; and
§ promoting and improving value-added manufacturing to broaden the tax base.
The Government is currently working towards achieving sustainable forest management in Namibia through the annual Government budget of approximately N$ 14 million, supplemented by the donor funds as shown in Table 10. Namibia has not yet reached the goal of sustainable forest management, as this is a long-term goal that is still in its early developmental stages in the country.
Forest charges are collected through the forest harvesting permit system, which is based on inventories and farm inspections. The system is designed to allow harvesting of forest products at sustainable levels and control the exploitation of forest resources. There are also restrictions on harvesting protected species to conserve biological diversity and ecosystem functions and forest concession contracts require concessionaires to use only authorised and sustainable forest practices.
The DoF staff, in co-operation with local police and communities, occasionally set-up check points (road blocks) to check the permits of anybody transporting forest products. This assists in curbing the illegal logging of protected species.
The DoF also operates forest nurseries to raise and sell seedlings to the general public. The subsidised costs of tree seedlings are meant to support or stimulate tree planting and care on farms and to reduce or mitigate deforestation.
At the moment, there is no direct sharing of revenue with other stakeholders. However, this will in future be possible under the new forest Bill, now under discussion in Parliament.
The forest revenue system is not entirely equitable because, at present, revenue is only collected from commercial operators in the sector and not from the large number of others engaged in the informal trade in the forestry sector. These traders could be included in the system at some future point in time.
In the agriculture sector, livestock loans have led to the fencing of public land. This, in turn, has led to over-exploitation and overgrazing of the remaining unfenced land and a decrease in the amount of forest and tree resources. This is the only major fiscal policy in other sectors that has an obvious effect on sustainable forest management.
The DoF is the lead agency for the development of the forestry sector in Namibia. The Government of Namibia has ensured that:
1. The budget is readily available to the Directorate of Forestry from the Ministry of Finance and the Government has always looked favourably on increasing the budget.
2. Training of Namibian staff has also increased over the years since 1990, as qualified staff are essential to maintain the various functions of the Directorate.
In 1992, the DoF produced a Forest Policy, followed by the first Namibia Forestry Strategic Plan (Forest Biodiversity for Present and Future Generations) in 1996. Both the Forest Policy and Strategic Plan aim at promoting sustainable forest management practices through community participation. In addition, the Government and non-governmental agencies attempt to improve and promote local and export markets for indigenous tree products. This is likely to stimulate more practical interest in forestry development in the country.
At the national level, forestry legislation includes the Forest Act of 1968, the new draft forest bill and the Nature Conservation Ordinance. The Nature Conservation Ordinance Amendment Act of 1997 allows the formation of wildlife conservancies to protect scattered trees or trees in groves within a conservancy and prohibits their destruction. Because such trees form part of the wildlife habitat and the physical beauty of conservancies, this law is generally respected.
The DoF has proposed new forest policy and legislation, to enable communities to have more control over forest management and utilisation. For example, the new draft Forest Policy, inter alia, aims to: “reconcile rural development with biodiversity conservation by empowering farmers and local communities to manage forest resources on a sustainable basis”. Until now, local communities have not managed their forests sustainably. However, the DoF has made a start with NWFP pilot projects in communities in Ontanda village (Uukwaludhi Community Forest). Hopefully, four years from now, there will be evidence of sustainable forest management by local communities.
The new draft forest policy will be supplemented by the new draft Forest Act of 1997, which proposes a more enabling framework of local participation in forest management. Article 10 defines the aims of forest management as: “the forest resources of Namibia shall be managed and developed in order to conserve soil and water resources, to maintain biological diversity and to supply the greatest amount of forest produce compatible with forestry’s primary role as protector and enhancer of the natural environment”. The new draft Forest Bill of 1998 (which is currently under debate in the Namibian National Assembly) was drawn up with the assistance of the FAO and will enhance participation of local communities and other stakeholders in forest management.
The Forestry sector is mentioned in the National Development Plans of Namibia (e.g. in the National Development Plan I (NDP I) and the NDP II, which is currently under preparation). The Government has not recently analysed or requested assistance to analyse how the economic, social and environmental performance of the forestry sector can be improved, but the current efforts to implement the Criteria and Indicators Dry Zone Process is quite relevant to this.
There is no co-ordinated forestry sector revenue collection system. The data seems to be available within a number of different institutions, but it needs to be synthesised properly. For example, the DoF and other institutions in the forestry sector collect all sorts of revenue, but information about this is not accessible because some institutions are very cautious and hence reluctant to divulge fiscal data.
Because of the problem above, it is currently not possible to determine reliably whether or not the DoF budget is more or less than the taxes and levies collected from the whole of the forestry sector. In particular, a major omission is the revenue collected from wildlife activities (which are dependent on services provided by the forest resource).
Recommendation: The total revenue raised from the forestry sector should be assessed to identify the financial contribution of the forestry sector to public finances. In particular, this should take into account the revenues raised from wildlife activities. DoF should continue this work and FAO should extend further support in this regard. This will also need confidence building amongst the different institutions that hold this information.
Ideally, the forest revenue system should include data from the DoF, Ministry of Finance and any other agencies involved in collecting forest related revenue. The system should summarise this information to provide an insight into the total contribution of the sector to public finances and could be published annually.
Recommendation: A centralised forest revenue system should be established to collect and disseminate information about revenue raised by the government from the whole of the sector.
Most of the funding to support sustainable forest management in Namibia comes from the Government. This funding aims to improve forest management, which was severely neglected during the pre-independence era. Forest revenue collected by the DoF (from tariffs and other services) is insufficient to cover the DoF’s recurrent and development budgets. However, the contribution of forest resources to the national economy (if properly accounted for) is at least ten times as large as the annual DoF Budget.
Certainly, in the future, it would be better to finance the DoF budget from taxes and levies accruing from the whole of the forestry sector. Charging for more of the services provided by DoF and stimulating forest-based industries could also expand the revenue base.
Recommendation: The forest revenue system should be reviewed and revised with the aim of increasing the financing of sustainable forest management from domestic resources. Further assistance in this area would be welcomed.
