Right across Africa, the race is on for non-oil economic growth as mineral-rich nations battle to build diversified economies – but there are many challenges. Almost every sub-Saharan African country suffers from a widening trade deficit as they import what they cannot make and struggle to export what they can. The widening trade deficit places great strain on the currency reserves that some countries have. Angola, having suffered recently from severe reductions in its foreign currency reserves since the oil price collapse and a dramatically weakened Kwanzaa, is now facing creeping inflation and a rising debt-to-GDP ratio.
The paradox is that Angola is rich in opportunities for external investors in a number of very fast-growing industries. One of these is timber. Angola is one the world’s fastest growing lumber exporters but it is still importing processed wood products from abroad because it doesn’t have a wood processing industry to speak of. In the short-term, Angola has the ability to significantly increase forest products exports which would bring a number of positive socio-economic benefits. Yet government policies are making it hard for timber companies to export to other African countries and right across the continent demand isn’t being met.
There are strong arguments in support of sustainable harvesting and increasing forest products exports from Angolan planted forests. Aside from contributing to the widening supply gap right across the continent, harvesting the country’s existing mature plantations would have a positive environmental impact by reducing pressure on natural forests. When plantation forests are established on areas without biodiversity values, and the establishment takes into account local people’s needs, the forests can be called sustainable. Plantations are strategic developments created by man in order to achieve sustainable timber supplies by reducing logging pressure in the natural forests. They are, at their very core, environmentally sound. They are actually great news for the world’s rainforests and given the right economic and regulatory environment can be extremely good news for socio-economic growth. Sustainable, ethical and community-friendly logging practices on man-made plantations are a win-win for the country, its people and the natural environment.
Angola is in a strong position to achieve that win-win scenario. When it comes to the timber industry Angola is in pole position to win the race. The country’s climate and landscape are perfect for the planting of new forests, and since there is currently an enormous shortfall in supply right across the African continent, Angola is perfectly placed to meet demand. In Africa, that shortfall is spiralling because of the pace of economic growth and the rising population. If wood is not used to support the construction of towns and cities, the alternatives are concrete, metals and plastics: which have a less carbon friendly footprint than wood. And, unlike wood, they are not biodegradable (every piece of plastic that has ever been made is still here – in our seas, forests, fields and streets). Yet where wood is essential, developers that cannot source timber from planted forests may turn to wood from our planet’s natural rainforests.
Estrela da Floresta is a timber company that is building a world class timber industry to bring economic prosperity to ordinary Angolans. The company was created to develop Angola’s timber sector through sustainable forestry practices. It takes eight to twelve years of careful forestry management to raise tree seedlings to maturity, which means that companies like Estrela da Floresta need to maintain and re-establish plantations in order for the industry to be sustainable. Right now, Estrela da Floresta has old and over-mature plantations that need to be harvested in order to make way for new trees. However, harvesting old wood and subsequent replanting is frustrated by well-meaning but problematic policies and regulations. New restrictions on exporting raw timber materials are holding back a virtuous forest lifecycle and this is not only bad for the forests but bad for economic diversification. The key concept here is sustainable fibre supply: sustainably managed forests that can supply wood and fibre without harming the environment and surrounding communities. Sustainability means that supply doesn’t end – this is precisely the kind of economic sustainability that African countries are striving for as they look to meet their pressing economic challenges.
The reality is that Angola’s wood processing industry is still immature, which is why the country is still importing wood products. This needs to change – but it can only do so if small, medium and large-scale wood processing industries are actively supported. Community-based plantations must be nurtured because they very often have better access to land than financial or industrial investors and they are intrinsically better at managing the fluctuating demands for labour over the seasons. Community-based plantations do, however, have their shortcomings. The Food and Agriculture Organization of the United Nations (FAO) says that at the current time it is difficult to identify the state of forest plantations in Angola – but that visual studies suggest 40-50 percent of plantations are “…in an advanced critical state of degradation generally caused by illegal cutting of neighbouring populations and the lack of silvicultural treatment and management.” In addition, community-based plantations very often have limited access to improved seedlings and they are often unaware of how to widen their market access. These shortcomings can easily be rectified with support from larger private sector planted plantations.
Companies that are in the planted forests industry have a responsibility to support community-based plantations not only because they create jobs and support socio-economic growth but also because they are contributing to the regional supply gap. The supply gap is not confined to raw sawn wood, but with wood and paper products. Demand for paper, packaging and panels is soaring. As demand soars, so too do imports and as imports rise, dollar reserves dwindle. This is a major economic issue for a country such as Angola. This is why it is so important that companies such as Estrela da Floresta support community-based plantations and do everything they can to promote wood processing industries. This will take time but it is realistic that in the medium-term, many wood and paper product imports in Angola can be substituted by local production.
Healthy, growing local production means that Angola can hold on to its dollar reserves and ease the pressure on its national currency. Over time, as the processing industry matures and producers begin to export to other nations, processed and unprocessed wood exports can reverse the wood trade deficit and reverse the outflow of foreign currency. And of course, there are myriad multiplier effects – job and wage growth, skills development and a stronger domestic supply chain. There is no quick fix to any nation’s economic woes, particularly in the context of today’s global economic and political uncertainties. However, it is patently obvious that there is significant low hanging fruit in fast-growing industries such as timber, that if responsibly utilised can deliver immediate short-term economic relief, medium-term industrial diversification and long-term socio-economic growth.
