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NATURAL RESOURCES ACCOUNTING -

NATURAL RESOURCES ACCOUNTING -. FORESTRY STUDY - TANZANIA JUNE 2005. outline. Introduction Objective of the study Background to Tanzania Forestry Sector Studies on forest accounting Approach and analytical methods to be applied. 1. Introduction.

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NATURAL RESOURCES ACCOUNTING -

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  1. NATURAL RESOURCES ACCOUNTING - FORESTRY STUDY - TANZANIA JUNE 2005

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

  3. 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.

  4. 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.

  5. 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.

  6. Importanceof 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

  7. 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!!!!!

  8. 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

  9. 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)

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

  11. for commercial logging and forestry 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 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 Resource rent calculations:

  12. 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).

  13. The work plan

  14. Continue……Workplan

  15. 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”

  16. FORESTS ARE WEALTH

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