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1 FINANCING of SUSTAINABLE FOREST MANAGEMENT in AFRICA: an OVERVIEW of the CURRENT SITUATION and EXPERIENCES by Peter C. Gondo S

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1 FINANCING of SUSTAINABLE FOREST MANAGEMENT in AFRICA: an OVERVIEW of the CURRENT SITUATION and EXPERIENCES by Peter C. Gondo S FINANCING OF SUSTAINABLE FOREST MANAGEMENT IN AFRICA: AN OVERVIEW OF THE CURRENT SITUATION AND EXPERIENCES♣ By Peter C. Gondo Southern Alliance for Indigenous Resources (SAFIRE) P.O. Box, BE 398 Belvedere Harare Zimbabwe August 2010 ♣ The views conveyed in this study are meant to spur discussion during the first meeting of the ad hoc expert group on forest financing (13‐17 September 2010‐ Nairobi, Kenya) and do not necessarily reflect the views of the UN Forum on Forests Secretariat, the UN Forum on Forests, or its member States. 1 Acknowledgements I would like to express my sincerest gratitude to Hossein Moeini-Meybodi and Afsa Kemitale and the rest of the United Nations Forum on Forests (UNFF) Secretariat who provided me with immense support and guidance during the execution of the study. I would also like to thank my dear friends Dr. Phosiso Sola and Dr. Davidson Gumbo for their invaluable and generous support in reviewing and providing valuable comments and suggestions for the improvement to the early versions of this paper. Lastly I would like to thank Mrs. Nyaradzo Dhlembeu and Mrs. Angelina Mutengwa for their help with the typesetting of the document. 2 Table of Contents Acknowledgements Acronyms and Abbreviations 1. INTRODUCTION.................................................................................................................................10 2. OBJECTIVES, METHODOLOGY AND SCOPE ............................................................................13 2.1 Objectives .........................................................................................................................................13 2.2 Methodology.....................................................................................................................................14 3. SOURCES OF FINANCING ...............................................................................................................14 3.1 Domestic public funding...................................................................................................................17 3.2 Official Development Assistance (ODA) .........................................................................................21 3.3 Multilateral ODA ..............................................................................................................................24 3.4 Other Multilateral Sources................................................................................................................29 3.5 Private Financing ..............................................................................................................................29 3.6 Philanthropic Funding.......................................................................................................................34 3.7 International Non-Governmental Organisations...............................................................................34 4. PAYMENT INSTRUMENTS FOR ENVIRONMENTAL SERVICES ..........................................36 4.1 Payment for Watershed Services ......................................................................................................36 4.2 Ecotourism ........................................................................................................................................37 4.3 Conservation conservancies..............................................................................................................38 4.4 Debt-for-nature swaps.......................................................................................................................38 4.5 Bioprospecting ..................................................................................................................................39 4.6 Carbon Finance .................................................................................................................................39 4.7 Other Emerging Instruments for Forest Financing ...........................................................................48 4.8 Regional forest management initiatives............................................................................................51 5. FINANCING NEEDS AND GAP ANALYSIS...................................................................................53 3 5.1Financing needs .................................................................................................................................53 5.2 Thematic Gaps ..................................................................................................................................56 6. TOWARDS STRENGTHENING FINANCING FOR SUSTAINABLE FOREST MANAGEMENT IN AFRICA ................................................................................................................61 6.1 National forest financing strategies for Africa..................................................................................61 6.2 Enabling environment.......................................................................................................................62 6.3 Financing the NLBI ..........................................................................................................................64 7. EXPERIENCES AND LESSONS LEARNT......................................................................................65 7.1 Financing sources and financial flows ..............................................................................................65 7.2 Payment for environmental services .................................................................................................68 7.3 Enabling environment.......................................................................................................................69 7.4 Financing needs and gaps .................................................................................................................70 7.5 Forest financing strategies ................................................................................................................70 8. CONCLUSION .....................................................................................................................................70 BIBLIOGRAPHY.....................................................................................................................................73 LIST OF FIGURES Figure 1: Forests and Woodlands of Africa................................................................................................10 LIST OF TABLES Table 1: Overview of forest financing sources ...........................................................................................16 Table 2: Mix of funding arrangements for pubic forestry institutions........................................................20 Table 3: Top ten recipients of forestry ODA in Africa 1994-1998.............................................................22 Table 5: GEF Financing Related to SFM from 1997 to 2005.....................................................................25 Table 4: Presence of Bilateral and Multilateral Donors Providing Forest ODA in Africa in 2000–2007 ..23 Table 6. Summary of wood product output in 2006 ..............................................................................30 4 Table 7: Financing needs for the forest sector........................................................................................53 Table 8: Lowest investment cost required to compensate deforestation/ degradation opportunity costs (USD million/year) ...........................................................................................................................55 Table 9: SFM Thematic areas requiring finance ...................................................................................57 Table 10: Summary of main external financing sources and their financing gaps 59 LIST OF BOXES Box 1: Examples of public domestic financing to the forest sector............ Error! Bookmark not defined. Box 2: Global Environmental Facility support to Cameroon .....................................................................26 Box 3: Tanzania National Forest Financing Strategy .................................................................................29 Box 4: Green Resources Plantation development in Africa........................................................................30 Box 5: Sappi and outgrower schemes.........................................................................................................31 Box 6: Conservation International’s Funds ................................................................................................35 Box 7: A debt-for-nature swap for the DRC...............................................................................................38 Box 8: Miombo Community Land Use and Carbon Management – Nhambita Pilot Project.....................42 LIST OF ANNEXES Annex 1: African forest area and area change, 2005 ..................................................................................91 Annex 2: Summary of presence of external Government financing sources in Africa (2005 – 2007) Error! Bookmark not defined. Annex 3:: Production, trade and consumption of wood based panels, pulp and paper, in Africa, 2009. .................................................................................................................... Error! Bookmark not defined. Annex 4: Total Value of African forest products exports in 2007.............. Error! Bookmark not defined. Annex 5: Potential of Climate-Change
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