CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
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Central Africa |
ECONOMY
As a whole, Africa’s forests cover approximately 650 million hectares
and represent nearly 17% of world forest coverThe Congo Basin is the world’s second largest forest region, coming after Amazonia. But, strange to relate, the six countries of Central Africa which take in the Congo Basin (Congo-Brazzaville, Congo RDC, the Central African Republic, Cameroon, Gabon and Equatorial Guinea), have very little legislation dealing with forestry issues. Illegal uncontrolled logging takes place regularly within some areas of the Basin. And what laws there are, are badly applied. Add to this, poor management and on-going corruption, and you have a sad situation in these countries.
There’s several reasons why the forests are badly utilized: Armed conflict has taken precedence over environmental policies; there’s general instability, over-population and, especially the fact that most of the companies concerned, find themselves obliged to contract-out and so have little control over what’s happening.
Congo’s forests abound in biodiversity, and if they could be protected, Congo Basin countries could strengthen their respective economies: they lose approximately 10 billion dollars each year because of illegal exploitation. Cameroon, for example, has 22.5 million hectares of forest area, of which 17.5 could be capitalized on as constructional timber. But frequently the various sawmills are supplied with poor quality logs, unsuitable for further use. Hence, financial yields are poor.
Let’s look at Congo-Brazzaville. Here, there’s not many local timber companies run by the country’s own citizens, but there are many private companies run by expatriates. Congo-Brazzaville has a land surface of 342,000 km² and is the fourth largest country in the Congo Basin. Its forests produce timber which, until 1973, was the country’s main export. But there is hope for the future, because it’s reckoned that by 2006, it will be «boom-time» as far as Congo’s forests are concerned. By 2006, there could be more than two million cubic metres of timber harvested, compared with the 800,000 cubic metres in 2001.
France and the United States
A meeting of countries concerned about protecting the forests of the Congo Basin took place 21-23 January 2003. African, French, American, Canadian, Belgian experts, among others, agreed to act together on such issues as: What can be done to protect the forests; pin-pointing priority fields of action for Congo basin countries; identifying areas where cooperation is possible i.e. actually working together. When it came to preserving the environment, Congo Basin countries moved into top gear.
France is a main donor nation for many Congo Basin countries and intends to give over 15 million euros during the coming three years. The French Fund for Safeguarding World Energy is contributing about 5 million euros. And the French Development Agency will give 30 million euros in the form of a loan, for three years.
Pierre André Wiltzer is France’s Overseas Co-operation representative. He emphasises: «We will try to find other contributions. An effort is being made to protect the forests —an effort which is both urgent and significant. It is part of new methods of joint development in Africa, which interest us greatly». Concrete action must be taken in order to mitigate the ecological disaster, so experts in forestry development are continually working out strategies aimed at improving the way in which Africa’s forests are administered.
To help the six countries of the Congo Basin, especially as regards the rational management of natural resources, the United States intends to contribute up to 53 million dollars. The initiative relates to eleven protected areas and will also include strengthening local ability in forest protection and management.
The fact is, with its 145 million hectares, the second largest forest region in the world is seriously threatened. Its forests are being abused. What legislation there is concerning care of the forests, is completely ignored or trampled under foot.
The World Bank and a forest tax system
The World Bank has published an in-depth consideration of a tax system vis à vis the forests within the Economic and Monetary Community of Central Africa (CEMAC). So as to conform to World Bank legislation, the Congo-Brazza government has recently raised the level of forest taxation from 4% to 8%. This is in some way approaching the taxation level of Gabon and Cameroon (17%) and has a precise aim: To once again emphasize the importance and value of the forestry sector and raise more income. It’s only to be expected that this move doesn’t please those in business in the forests.
In fact, the Congo-Brazza government had already signed an agreement with companies operating in the forests covering a ten-year period (1996 to 2006). The companies concerned, now accuse Congo-Brazza of unilaterally breaking this agreement. They wrote: «The 1996-2006 agreement stipulates that the State has guaranteed tax stability vis à vis the forests, which cannot be supplanted in the future by any other legislation».
Complaints
According to these companies, the agreement is clear and still valid. Jean-Marie Mevelec is general manager of the Congolaise Industrielle du Bois (CIB-Congo) company. He emphasises: «We respected this agreement because within the last four years we have been able to create many jobs. Our own work force has risen from 850 employees to 1,700. We’ve respected everything asked of us, even when, strictly speaking, it was not laid down in the agreement. For example, let’s take the case of long-lasting forestry management which we’ve taken on board these last three years by achieving many improvements. CIB now has specialised personnel to ensure these improvements are carried through». Bruno Delanoue is administrative and financial director of another company, the Industrie Forestière d’Ouesso (IFO), part of the Danzer group. He adds: «There is currently a tax law which penalizes industrial production. It’s deplorable for us. Companies such as ours were forced into agreements by the Congolese government. Curiously, this same government is today reneging on these agreements. Two years ago, we were told: invest and produce. We’ve done this. Today, they’re hitting us hard by taxing industrial production which certainly does nothing to encourage investment in the timber industry. However, we are rather good taxpayers who pay our taxes regularly. We’ve not reneged on agreements. It’s the State which has contradicted itself».
IFO maintains there’s been a 204% increase in taxes. Losses exceed 100 million CFA francs per annum. CIB says there’s been a 250% increase in taxation and a 13% increase in taxation on sales turnover which vary between 28 and 30 billion CFA francs i.e. an increase of about 4 billion. Companies in the same line of business as IFO and CIB affirm: «These rates are higher than our profits and our capital. At this rate, we’ll have nothing more to invest. So cut-backs may be necessary».
In fact, the increase in this kind of taxation is about 9 billion CFA francs when compared to previous taxation — this provides the State with about 2% of its budget. A company worker puts it this way: «How can one justify endangering the livelihoods of 1,700 employees by providing the State with just 2% of its budget? I think the World Bank is off-target. This is not the right way of going about things, because once a company hits rock bottom it’s extremely difficult to get going again. The World Bank has pressurised Congo-Brazza into aligning itself with CEMAC‘s taxation level. It should be understood that we are 1,250 km from Douala, and most of Cameroon’s forest companies are 600 km from Douala. The decision-makers are living in cloud cuckoo land. Transport is very expensive. Transport costs per cubic metre of load from Dolisie to Pointe-Noire are 12,000 CFA francs. But from Pokola to Pointe-Noire per cubic metre, we’re talking about 55,000-60,000 CFA francs.
Companies placed in this situation have called on the President to intervene and talks have opened with the government. They say: «One option is to end all our operations in the forests. The way things are, we’re slowly grinding to a halt. Matters are fast getting out of our control».