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Business News of Monday, 12 May 2014


FC loses $16m to low stumpage fee

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The Forestry Commission (FC) has lost $16 million in the past 10 years as a result of the non-adjustment of the stumpage fees paid by loggers.

In line with the forestry law, stumpage fee, which is a tax paid by individuals and organisations for felling trees, is supposed to be adjusted every quarter of the year.

However, a civil society organisation is also attributing the loss of revenue to the Commission to a weakness in the law which did not make provision for adjustment in times of inflation.

It has also been identified that the non-adjustment of the stumpage has caused a decline in the market value of some of the forest species on the global market.

Forest Watch report

These revelations were made known at a press conference in Accra organised by the Forest Watch, a non-governmental organisation.

Addressing the media in Accra on Friday, a Forestry Consultant with the Hamilton Resources and Consulting, Mr Gene Birikorang, said the situation was alarming and needed to be resolved immediately to save the commission and Ghana's forest reserve.

In spite of his admission that some measures had been instituted recently to boost the collection of the stumpage fees by the commission, he indicated that more could be done.

In the short term, Mr Birikorang said there was the need for the Forestry Commission to implement quarterly reviews of stumpage fees in line with the quarterly average rate of inflation.

He also advised that in the medium term, the commission should actively engage civil society organisations to participate in monitoring the supply chain of timber.

A report issued by Forest Watch recommended that the commission endeavour to pursue a priority agenda for resource management support centres and build capacity to ensure a credible traceability of timber volume and value.

Long-term vision

In the long term, Mr Birikorang called on the Ministry of Lands and Natural Resources to lead in pursuing a vision of reaching a tripartite on managing a long-term forest fiscal strategy through Executive rather than Legislative Instrument, adding that “This MoU must be endorsed by cabinet.”

The Coordinator of Forest Watch Ghana, Mr Samuel Mawutor,said the association was dedicated to protecting the nation’s forest reserves, and called on Ghanaians to do their best to ensure their protection.

In spite of the recommendations provided, he indicated that there was the need to rethink how the nation managed its forest reserves.

Mr Mawutor said the act of illegal tree felling had caused the nation a lot of money, but noted that there were some lower species that could be enhanced to give value for money to the nation.

“Most of the high value species have been lost, but we can invest in the lower species to meet the world market standards,” he observed.

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