Policies towards wood products exports in Nigeria
Creators: name: Enabor, Ephraim Ediale
Publisher: name: University of British Columbia
Year: 2010

description: Rational use of Nigeria's forest resources is analyzed with the objective of identifying policies towards wood products exports which should enhance the contribution of the forestry and forest industries sector to the economy. From an examination of the role of international trade and expansion of exports in economic development, it is concluded that the experience of currently underdeveloped countries does not vindicate the 'classical' view of foreign trade as an "engine of growth". Nigerian economic growth is closely connected with developments in foreign trade.. The full impact of trade on the economy has not been realized due to political and institutional obstacles. Forestry and forest industries can exert a potentially propulsive influence on economic development. Several factors determine the role of forestry in economic growth. The sector need not be a leading one in every economy. The importance of the sector should be judged on the basis of its relative efficiency in utilizing scarce resources to promote national welfare. Several studies, particularly by the FAO, have ascribed a major role to wood products exports in accelerating economic growth in tropical developing countries. International trade in tropical hardwoods has expanded greatly in the last fifteen years. The developmental patterns reveal that the trade is heavily concentrated on logs directed to markets in industrially advanced countries. It is argued that such trade patterns largely benefit the importing countries. Tropical developing countries should regulate the use of their forest resources for national development through domestic processing of wood before export." The developmental trends of Nigeria's wood products export trade reveals a striking similarity to those of other tropical developing countries. Logs account for about 86% of the total annual export volume; 70% is in three wood species, and 90% is directed to Western Europe. Over the last decade, the annual volume and value of Nigerian wood products exports have declined continuously. The export decline is attributed to resource deficiency and unsettled policies, rather than deficiency of external demand. Appraisal of the role of forestry in the national economy showed that the sector is declining in relative importance. The sectoral contribution to the economy was assessed using such indicators as, share of GDP, contribution to domestic incomes, employment, foreign exchange earnings, investment and value-added, as well as linkage effects. The pattern of commercial exploitation of timber for export and uncontrolled shifting cultivation are the predominant factors reducing the impact of the sector on the economy. To maximize benefits from use of the forest resource, Nigeria must adopt sound policies towards the wood products export trade. Urgent steps should be taken to increase domestic processing of wood, expand the range of timbers used and diversify markets. Three alternative policies are identified and analyzed on the basis of relevant national goals, evaluation criteria, constraints and process. The policy alternatives include, laissez-faire (or "do nothing"), incentives to private industry, and government regulation and control of exports. A laissez-faire policy is rejected because markets for wood products are imperfect. Private industry, motivated solely by profits, cannot be relied on to voluntarily implement the desired change in wood products export patterns. A combination of elements of the other two policy alternatives is justified. Incentives to private industry should include reduction or elimination of export taxes on processed wood products, lower fees and royalties on lesser-known timbers, provision of wood seasoning and treatment facilities at minimal cost, and assistance in negotiating shipping space and freight. Government should cooperate closely with private industry in research, product development and export promotion. The use of incentives must be justified to avoid misallocation of the economy's resources. A ban should be placed on exports of premium timbers, such as mahogany, iroko and guarea, in log form. Other timbers may be exported as logs on the condition that there is no domestic buyer. Establishment of statutory marketing of timber under a Timber Marketing Board is rejected. Indigenous enterprises would be the greatest losers under such a policy. Government should control wood products export marketing by establishing compulsory grading standards and a timber inspection service. The Nigerian Timber Association should be reorganized and partially financed by government. Expansion of wood products exports is not a requirement for Nigeria. The need for consistency between forest and national development objectives is stressed. The basic policy considerations include the productive and protective functions of forests. A forecast of potential wood requirements indicates a possible increase from 60 million m³(r) in 1971 to 93 million m³(r) in 1985, and 130 million m³(r) by 2000. Early plans must be made to supply these requirements within the limits of economic feasibility. The problems of forestry and forest industries development include land use and land tenure, productivity and utilization of the forest resources, poor equipment and wood processing methods, inadequate financing, lack of trained personnel and meagre research. These problems must be resolved if forestry is to contribute significantly to achievement of national goals. The need for integrated planning of the sector is emphasized. Recommendations are made for the attention of government and the wood-based industry. Most important among these, is the establishment of a National Forestry and Forest Industries Development Council, including government and industry representatives. The Council should be charged with responsibility for planning of the forestry and forest industries sector, and interpretation of policy. Policy analysis is a complex exercise, especially under the environment prevailing in a developing country. Nonetheless, reliance on foreign trade needs to be de-emphasized. The use of forest resources should be dictated by national goals.