ITTC-55

Adding value to timber in Africa—huge challenge, huge opportunity

Highlights for Tuesday, 3 December 2019
The podium of the high-level panel discussion held as part of Trade and Markets Day. Photo: R. Carrillo/ITTO
The massive restoration of degraded forest landscapes in West Africa, combined with strong incentives for private-sector investment, could help lead economic development while meeting a looming timber supply deficit, according to speakers at a high-level segment of the International Tropical Timber Council’s inaugural Trade and Markets Day.
 
Speaking during the segment, ITTO Executive Director Dr Gerhard Dieterle said that the growing population in Africa, combined with ongoing forest degradation, meant there was considerable danger of a downward spiral in which people put increasing pressure on increasingly scarce forests, leading to ongoing land degradation and a range of other serious consequences.
 
On the other hand, said Dr Dieterle, “If we were to rebuild degraded forests, it would have tremendous benefits for wood security and employment”.
 
Optimizing the economic benefits of a substantial forest landscape restoration programme requires sustainable and legal supply chains, he said, but developing these was a major endeavour requiring capacity building among many stakeholders, especially small-scale producers, along supply chains.
 
Other speakers in the high-level segment, which was moderated by Sheam Satkuru, ITTO’s Director of Operations, indicated a strong intent in governments to develop forest plantations as a means to pursue sustainable development objectives related to a green economy, climate change, poverty alleviation and the reversal of land degradation, among other things.
 
David Wonou Oladokou, Togo’s Minister of Environment, Sustainable Development and Nature Conservation, said there was increasing interest among smallholders in his country in growing wood in planted forests. These actors need to organize so they can better engage with government on policy issues and to build capacity in forest and business management, he said. It was also important to add value to the wood being harvested in the country’s plantations, and this required government support.
 
Dr Oladokou said his government had policies in place to incentivize forest-growing, but more was needed.
 
“We are attached to the fate of the private sector, we need to support them,” he said. “Forestry requires long-term investments.”
 
Cameroon’s Minister of Forests and Wildlife, Jules Doret Ndongo, said that his government was setting up a national forest plantations programme to create a new forest economy based on plantation-grown timber. This would require major investment.
 
Dieudonné Sita, Director of Forests in the Congo’s Ministry of Forest Economy, pointed out that a major problem facing any potential investor in forests, wood processing and legal supply chains, especially smallholders, is a lack of access to finance.
 
“At the level of the subregion and in my country, banks are unlikely to finance operations to increase the value of timber products,” he said. Many domestic actors are experiencing serious cash-flow problems and are looking to government for support, he said.
 
The problem is acute. According to one intervention from the audience, “forest industries in our countries are on their knees. No banks are willing to support the timber industry to grow.”
 
Some countries, such as Benin and Togo, have government policies in place to encourage private-sector investment in reforestation, but much more is clearly needed.
 
There was a call for governments to create major incentive packages, as had been done in other regions, especially Asia, to stimulate the forest industry. Panellists requested ITTO to continue supporting efforts to increase investments in forest plantation development, value adding and legal and sustainable supply chains, especially through capacity building.
 
The podium of the Annual Market Discussion held as part of Trade and Markets Day. Photo: R. Carrillo/ITTO
Change of mindset needed to create value-added industry in Africa, says Annual Market Discussion panellist
 
Africa’s governments and the private sector must jointly take ownership of the challenge of developing a value-added wood industry, focus on opportunities and stop being daunted by problems, according to one of the speakers at this year’s Annual Market Discussion, which took place as part of the Trade and Markets Day during the 55th Session of the International Tropical Timber Council.
 
“Africa should take heart from the success of other regions but develop solutions specific to its situation rather than copying what the winners did,” said Mafa Chipeta, who spoke provocatively at the Annual Market Discussion.
 
“Africa’s development in all areas has been weak, and a culture of laying blame on others instead of finding own solutions has taken root,” he said. “The failure of private investment in Africa is almost certainly mostly due to failure of government policy, commitment and discipline.”
 
Professor Chipeta set out five “intervention areas” he considered were needed to industrialize Africa’s forest sector: changing mindset; having higher ambition and persistence; promoting a local stake in the industry; growing the African market and negotiating fairer trade and investment agreements; and investing—in plantations, infrastructure, and human and institutional capacity.
 
Other speakers at the Annual Market Discussion addressed various aspects of the challenge of promoting value-adding development in Africa’s forest sector.
 
Pyoabalo Alaba, Water and Forest Engineer and Director General of Togo’s Office of Forest Development and Exploitation (ODEF), described the status of Togo’s forest resources and forest industry and addressed some of the constraints.
 
“We have a real need to modernize and overhaul our processing,” he said. “The private sector cannot obtain funds from banks because of insufficient safeguards and guarantees. The economic agents of the timber industry largely work informally. Everyone is acting in isolation from everyone else, and we need to formalize the sector.”
 
A young entrepreneur in Togo’s forest sector, Ayite Gaba, said that the country’s teak processing industry faced two major challenges: an overdependence on buyers from India, which meant that local processors needed to buy their logs at international prices, which few could afford; and the low quality of locally produced teak furniture, largely because of the low-quality teak logs the industry inevitably obtained. Mr Gaba made four recommendations to address the situation, including that the government provide incentives to help Togolese grow successful teak businesses that can compete internationally.
 
Fifonsi Ayélé Dangbo presented the recommendations arising from the ITTO Regional Workshop on Smallholders Forest Landscape Restoration in West Africa, held in Lomé just before the Council session. She said the common characteristics of forest smallholders include limited access to land; low financial capital; a general focus on subsistence; the use of only simple production technologies, and dependence on others for marketing which creates a high level of vulnerability and risk of exploitation. The workshop made five recommendations, including the following two: governments should establish land and tree tenure for the effective empowerment of smallholders undertaking forest landscape restoration, and create incentive mechanisms and management support for smallholders; and smallholders should be supported to improve the growth, quality and productivity of plantations and in the development of markets.

Professor Labode Popoola, from the University of Ibadan, Nigeria, explored the dynamics of intra-African timber trade. He said that such trade “has enormous potential for creating employment, catalysing investments, fostering economic growth, reducing poverty and enhancing wood and energy security”. He made a number of recommendations, including on the need to build sustainable institutions and partnerships across sectors and economies to encourage timber trade among African countries.
 
Roy Southey, Executive Director of Sawmilling SA, outlined the development of South Africa’s forest industry, from its early days in the last century to today. Three factors seemed especially important, he said: a strong mining industry, which brought skilled workers to the country and created domestic demand for timber; a timber shortage, which created impetus for the country to develop plantations with the view to achieving timber self-sufficiency; and a period of international isolation, which forced investment to create a domestic timber processing industry.
 
Rik Sools, Managing Director of Form International, spoke about his company’s experiences in developing teak plantations in Ghana. Addressing the question of why there is so little teak processing in Ghana.
 
“Mainly the timber industry is focused on natural forest timber, and the big operators have not seriously moved to plantation timber,” said Mr Sools. Moreover, most teak on the market is quite young (12–15 years old), but there is pressure on the resource, leading to the harvesting of small-sized trees and, consequently, low prices for growers. This had led to another problem in the sector.
 
“Small growers have become discouraged because of this dynamic,” said Mr Sools, “and are considering other land uses, such as cashew.”
 
Mr Sools concluded that, among other things, better organization of producers, investment and technical support are needed to stimulate improved plantation management, local processing and resolve current bottlenecks. The Government of Ghana, ITTO and other stakeholders could support this transition by providing incentives, support pilot projects and facilitate more research.
 
In the ensuing discussion, a delegate from Viet Nam noted there were two key elements of his country’s success in developing a wood-processing industry. One of these was land-tenure reform in the 1990s, in which state-owned land was allocated to farmers. Combined with a payment scheme for forest services funded by downstream water users, farmers were encouraged to restore their land with trees. Today, Viet Nam has more than 3 million hectares of commercial planted forests. The other key element of success, said the delegate, was the privatization of industry, enabling the private sector to invest in and develop the wood industry. Today, there are more than 5000 wood-processing enterprises. Viet Nam banned the logging of natural forests in 2016.
Barney Chan delivers the Trade Advisory Group's statement during the Trade and Markets Day held on day 2 of the 55th Session of the International Tropical Timber Council. Photo: R. Carrillo/ITTO
Tree planting “revolution” needed to help limit climate change, says Trade Advisory Group
 
ITTO should focus on the positive relationship between trees and carbon sequestration, according to the Trade Advisory Group, which delivered a statement on Trade and Markets Day at the 55th Session of the International Tropical Timber Council.
 
According to the statement, “there is scientific evidence growing trees is good for the climate, [and] we should capitalize on this.”
 
“Council should be aware of the increasing interest shown globally to establish tree plantations. And more importantly, Council should know the struggle by investors and other stakeholders to plant trees. There is probably enough biological science and knowledge available on how to grow trees, with enough care to biodiversity, but what is holding back plantations of significant scale?”
 
The Trade Advisory Group suggested that ITTO could play an important role in unlocking obstacles to the creation of tree plantations, especially in the context of ecosystem restoration.
 
“There is already a lot of expertise in member countries and elsewhere,” said the statement, “but ITTO need to show leadership and harness this collective expertise into a practical way forward.”
 
The Trade Advisory Group requested the Council to fund an international meeting of experts on facilitating commercially viable plantations in the tropics, or the development of an international tropical timber plantations strategy. It posed the question, “Are we capable to ignite a tree plantation revolution to save the climate?”.
 
Read the full statement here.

Also on Trade and Markets Day, Sarah Storck and Rupert Oliver presented on the situation in tropical timber markets in the European Union as part of work by the Independent Market Monitor; Ivonne Higuero, CITES Secretary-General, addressed the agenda item on enhancing cooperation between ITTO and CITES; Jose Bolanos from the European Forest Institute informed delegates of developments in the Global Timber Tracking Network; Marie Vallée, from the World Resources Institute, spoke about the Open Timber Portal; and Rikiya Konishi presented on the  APEC Expert Group on Illegal Logging and Associated Trade (EGILAT).

Click here to access the presentations of the Trade and Market Day.
ITTO Executive Director Dr Gerhard Dieterle speaks during the high-level panel discussion held as part of Trade and Markets Day. Photo: H. Apedo
ITTO Director of Operations Sheam Satkuru moderates the high-level panel discussion held as part of Trade and Markets Day. Photo: R. Carrillo/ITTO
Dr Oladokou, Togo's Minister of Environment, Sustainable Development and Nature Conservation, said his government has policies in place to incentivize forest growing, but more needs to be done. Photo: H. Apedo
Cameroon’s Minister of Forests and Wildlife, Jules Doret Ndongo (centre), addresses the high-level panel discussion held as part of Trade and Markets Day. Photo: R. Carrillo/ITTO
ITTO Projects Manager Tetra Yanuariadi presents on forest certification and market access on day 2 of the 55th Session of the International Tropical Timber Council. Photo: R. Carrillo/ITTO
Sarah Storck and Rupert Oliver present on the situation in tropical timber markets in the European Union as part of Trade and Markets Day. Photo: R. Carrillo/ITTO
CITES Secretary-General Ivonne Higuero (second from the right) spoke about cooperation between CITES and ITTO and informed delegates of recent developments in CITES listings of timber species. Photo: T. Yanuariadi/ITTO
Cindy Squires from the International Wood Products Association speaks from the floor on cooperation between ITTO and CITES. Photo: R. Carrillo/ITTO
A delegate of the USA intervenes from the floor on cooperation between ITTO and CITES. Photo: R. Carrillo/ITTO
A delegate from Côte d'Ivoire intervenes from the floor on cooperation between ITTO and CITES. Photo: R. Carrillo/ITTO
Participants listen to discussions during Trade and Markets Day. Photo: R. Carrillo/ITTO
ODEF Director-General Pyoabalo Alaba spoke about the challenges and opportunities for wood processing in Togo. Photo: H. Apedo
Mafa Chipeta spoke provocatively during the Annual Market Discussion on the future of wood processing in Africa. Photo: H. Apedo
Togolese delegate Detse Komla listens during the Annual Market Discussion. Photo: H. Apedo
Rikiya Konishi (Japan) presented on the APEC EGILAT process on day 2 of the 55th Session of the International Tropical Timber Council. Photo: R. Carrillo
From left: Jose Bolanos, European Forest Institute; Marie Vallée, World Resources Institute; and Björn Merkell, Council Vice-chair. Photo: R. Carrillo/ITTO
Photo: H. Apedo