Abirami
Staff correspondent
Ghana’s land area of 239,460 square kilometres is ecologically divided into three main regions: a savanna (which includes coastal, Guinean, and Sudanese savannah) covering 15,7 million hectares, a high-forest in the south (8.2 million hectares), and a transition zone (1.1 million hectares of mostly semi-deciduous forest in the middle belt). Exploiting all available business opportunities in these areas is essential to Ghana’s mission of developing a robust economy and thriving business sector. The forestry industry is one such area with a lot of commercial potential that the government, private sector, and other stakeholders have not been able to fully realise.
About one-third of Ghana’s territory is covered in forests, with most of the nation’s commercial forestry enterprises located in the south. The forestry industry made a substantial contribution to Ghana’s economy in 1990, accounting for 4.2 per cent of the nation’s GDP. Exports of timber were particularly significant which constituted the country’s third-largest source of foreign currency income.
Since 1983, the forestry industry has seen significant changes, including an influx of more than US$120 million in aid and commercial loans. Due to these changes, profits more than doubled between 1985 and 1990, reaching US$140 million in 1993 for timber and wood products. Before the 1980s, Ghana’s forestry industry had to contend with issues including an inflated cedi and a failing transportation system. As a result, output and exports during that time period significantly decreased. The World Bank’s US$24 million financing for wood restoration in 1986 helped the forestry industry grow. This finance made it easier to acquire logging machinery, which improved log production and income from exports.
Ghana is regarded as one of the most developed tropical African nations when it comes to having a National Forest Standard and other guiding concepts, criteria, and indicators for assessing the efficacy of forest management and use. The former Ghana Timber Marketing Board was replaced by two organisations: the Forest Products Inspection Bureau, which is in charge of quality assurance and oversight, and the Timber Export Development Board, which is in charge of marketing and pricing.
Ghana sells wood in an effort to maintain its commitment to using only legal wood from environmentally friendly sources and to uphold the ideals of the International Tropical Timber Organisation. This indicates that Ghana is working to obtain FLEGT (Forest Law Enforcement Governance and Trade) licencing from the EU and is doing so within the US Lacey Act regimes, with the assurances that Ghana will remain a leader in the global tropical timber market for a very long time. With a long history of forest management and the ability to conduct forest research, Ghana has a strong Forestry Commission (FC), which includes an overseas office (FC London Office). More than 17 distinct types of wood products are produced in Ghana at a number of small, medium, and large processing facilities.
In terms of generating employment opportunities, providing local people with a source of income, earning foreign currency through the sale of timber products, and safeguarding the environment, the forestry industry is one of the most significant in the Ghanaian economy. Numerous material and intangible products, including timber and wood products, non-timber items including bush meat and other wildlife products, bamboo and rattan, essential oils, tannins, resins, gums, dyes, cork, honey, and medicinal plants, among others, are produced by forestry.
Timber production continued to be Ghana’s third-largest source of foreign exchange earnings between 1990 and 2015, and it has been expanding nominally over time in terms of its share of the Gross Domestic Product (GDP). However, as a result of the COVID epidemic, Ghana’s forestry and logging sector only made up around 1.9 billion Ghanaian cedis (GHS), or about 312.5 million US dollars, of the GDP in 2020. Comparatively, the previous year saw the registration of almost 2 billion GHS, or 329 million USD, in total. 2018 saw the biggest contribution throughout the period.
The export of wood products reached 237,464 m3 from January to August 2022, up from 198,418 m3 during the same time period in 2021, a 20% year-over-year rise. A large increase in export volumes, including plywood (175%), air-dried boules (150%), plywood for the regional market (44%) and air-dried timber (32%), was responsible for the strong performance. This development contributed to the 20% year-over-year increase.
The formal sector, which includes regulated enterprises producing wood and wood products, makes for the majority of the forest’s contribution to the national accounts. The informal subsector, which is made up of Small and Medium Forest Enterprises (SMFEs), broadly encompassing wood products, non-wood forest products, and forest services, is not taken into account in the national accounts even though it provides over 3 million Ghanaians with an additional or alternative source of income.
There are 30,000 small carpentry businesses with 2,00000 persons employed by them. Around 1,30000 Ghanaians work in the illicit chainsaw milling sector, where the bush-meat industry employs 5000–6000 individuals. An estimated 2 million people rely on woods for their traditional and subsistence ways of existence.
Serious deforestation was a major problem the sector had to deal with. Only around one-third of Ghana was still covered in forests by the early 1990s, and not all of them were economically useful. The need for money and conservation activities had to be balanced by the government. The government sought to boost sales of wood products to take the place of revenue from logs in order to address concerns about deforestation. A change in focus resulted from the finding that one cubic metre of processed wood products was worth more than an equivalent volume of logs.
The timber processing business was confronted with a number of obstacles, such as a lack of kiln capacity, less alluring foreign investment incentives than in other industries, neglected infrastructure, and a lack of management and technological skills. Sustainable forestry practises in Ghana are nevertheless hampered by pervasive corruption and difficulties implementing laws, despite the government’s efforts to reform the industry and reduce deforestation.
