NATURAL RESOURCES ACCOUNTING

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NATURAL RESOURCES ACCOUNTING -

• FORESTRY STUDY - TANZANIA
• JUNE 2005

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outline

• Introduction
• Objective of the study
• Background to Tanzania Forestry Sector
• Studies on forest accounting
• Approach and analytical methods to be applied

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1. Introduction

• Forestry benefits are not well addressed in the
  national accounts apart from marketable
  commercial products like timber.
• the contribution of forestry to the national GDP
  is very small.
• However, it is important
• to determine whether there is over-extraction
  from natural forest reserves.
• to determine the rate of consumption and that of
  resource depletion.
• Forest Accounts is a new subject in the Tanzanian
  context and there are limited studies.
• In most cases in the National Accounts, forestry
  is looked as part of agricultural accounts.

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OBJECTIVE OF THE STUDY

• To construct forest accounts information and show
  the real contribution of forests in the national
  economy by compiling and analysis of data on
• Physical asset accounts wooded land (area),
  standing timber (volume)
• Production of goods and services volume and
  value for timber and timber-related products,
  NTFP, and environmental services
• Forest management accounts government
  expenditures on forest management,
  royalties/taxes received
• Employment at different levels.

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Background to Tanzania Forestry Sector

• Forest resources Tanzania has about 33.5 million
  hectares of forests and woodlands.
• Classification can be by
• (i) Forest Type Forests 1256 ha.
• Woodlands 32299 ha.
• (ii) Use of Forest Land Production Forest 23810
  ha. Protection Forest 9745 ha.
• (iii) Legal Status Forest Reserves 12517ha.
• Forest/Woodlands within National Parks 2000ha.
• Non-Reserved Forest Land 19038ha.

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Importance of Forest Resources

• Forests has major roles in the environment,
  social and economic welfare of both rural and
  urban populations
• commercial forest products includes timber, honey
  and beeswax non-commercial forest products and
  forest services
• GDP has been around 3,
• employment of about 800,000 per year,
• consumption of wood for fuel is estimated at 27
  million m3 per annum (95 energy use)
• 10 15 percent share of registered export
  earnings

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• Continue..
• biodiversity hotspot area, plenty/variety of
  species, shelter for wild animals, national
  parks,
• forests render an important watershed services
  and land protection from erosion, carbon
  sequestration etc,
• Forests are determinants to growth in
  other sectors!!!!!

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Studies on FA

• Previous studies on forest accounting are
  limited
• Two are currently recognized
• Valuation of non-marketed forest products-
  fuelwood for tobacco curing
• Economic valuation of forest resources covering
  catchment forests

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The Task

• To construct Forest accounts using information
  already available for
• Forest assets, based on information within FBD
  and other sources
• Forest goods, volume and value, using data from
  FBD and NBS and other sources
• Forest management expenditures from the Ministry
  of Natural Resources and Tourism (MNRT), MoF
• Government forest revenues from taxes, royalties,
  fees, etc. from the MNRT and MoF.
• (The data will be in Tables)

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Continue..

• Compile data on forest employment
• Calculation of resource rent for forests.
• Compile monetary asset accounts for forests

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Resource rent calculations

• for commercial logging and forestry in the
  national accounts
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• Value added (VA)
• Of which,
• - Taxes/subsidies
• - Compensation of employees (CoE)
• Net operating surplus
• - Consumption of fixed capital (CFC)
• Normal return to capital
• Value of fixed capital
• 10 of fixed capital (NR)
• Resource rent VA-CoE-CFC-NR

• for non-commercial forestry activities in the
  national accounts
• Value added (VA)
• Of which,
• Taxes/subsidies
• Compensation of employees (CoE)
• Net operating surplus
• Consumption of fixed capital (CFC)
•  Normal return to capital
• Value of fixed capital
• 10 of fixed capital (NR)
•  
• Resource rent VA-CoE-CFC-NR

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Calculation of monetary accounts for volume of
standing timber

• Net Price (NP) method (Hassan, 2003)
• may be used in this case for valuation of
  standing timber assets
• Hence the net accumulation in asset values (Dt)
  is calculated as the product of the NP and the
  net change in standing stocks. i.e.
• Dt (Gt Ht) x (Pt Ct)
• Where
• Pt per unit resource price
• Ct extraction costs
• St stock of the forestry asset at time t
• Gt growth from natural regeneration and other
  additions and
• Ht extraction (harvesting, damage, etc).

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The work plan
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ContinueWorkplan
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The budget for the study is to cover the cost of
data acquisition, equipment, stationary,
photocopying, traveling and transport,
communication and working allowances for the
research team

• The challenges
• The classification of forests
• Absence of monitoring data, reliable statistics
  and forestry inventories, etc
• speculations

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FORESTS ARE WEALTH