Performance of the Gabonese forest industry 1

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Gabonese forest industry. African Development Bank. Abidjan, Côte d’Ivoire.

Performance of the Gabonese forest industry 3

01 INTRODUCTION

T he forest industry is a major resource for Gabon. According the most

recent FAO statistics, the total forest area for Gabon was estimated at
23.62 million hectares (ha) in 2010 and 23.5 million ha in 2020 with a modest
net annual change between 2010 and 2020 of 11,900 ha or a deforestation rate
of 0.05%. About 99.9% of the Gabonese forest is naturally regenerating, while
forest plantations are estimated at only 30,000 ha, and together they cover
over 85% of the national territory. About 63% of the forest is under forest
concession management1. The forestry sector is the second largest employer
after public services with over 10,000 permanent jobs in forest production and
a further 10,000 jobs in forest industries2. Employment has increased, driven
by the number of wood processing industries established in the Gabon Special
Economic Zone (GSEZ) in Nkok between 2009 and 2018. These industries
grew from 80 in 2009 to 155 in 20183. Prior to the discovery of petroleum
in the mid-20th century, forestry was the leading foreign exchange earner in
Gabon and the country’s primary economic activity. However, despite the
emergence of the oil industry, forestry remains a major foreign exchange
earner contributing 3-5% to national GDP with tremendous opportunities for
further improvement4.

Gabon’s Head of State recognized the timber sector as a priority for reform to exported. After the ban and with the promotion of primary processing, the country
enable it to lead the industrialization of the national economy. The government could retain up to 20% of market value with still 80% exported. The export of primary
is committed to an ambitious target of 100% Forest Stewardship Council products also implies the export of 50,000 – 60,000 jobs that could be generated
certification (FSC) for all its forest concessions by 20225 which would be a feat with secondary and tertiary processing of sawnwood for example to finished products.
few countries have achieved. This direction provides tremendous opportunities This could increase revenue from $200 million to over $1 billion per year”6. The
for increasing the technical, social and economic performance of the forestry Director of the Gabon Special Economic Zone, elaborated how the value addition was
sector. One of these opportunities lies in adding more value to its timber handled: “the projects which the government can support to get desirable outcomes
products domestically, which Gabon has been working towards for some in the forestry sector include (1) Furniture making project, (2) Alternative raw material
years, even taking the step of prohibiting the export of primary unprocessed project and (3) Support and development of two additional SEZs in Lamberene and
timber. The Minister in charge of forests in Gabon explained the rationale for Franceville. Logs may bring in $150 per cubic metre, veneers will bring in $500 per
the decision, “prior to the enactment of the total ban on log exports, the country cubic metre but furniture can bring in $2000 per cubic metre. In terms of employment,
was getting a mere 3.6% of the market value of its timber, meaning over 96% was logs can generate 10 jobs, veneers 100 jobs but furniture will go up to 1000 jobs for
a given quantity produced and exported. The implication is that the three projects
1
EIA (Environmental Investigation Agency). 2019.Toxic Trade. Forest Crimes in Gabon and the if properly supported and implemented can bring the change that the timber sector
Republic of Congo and Contamination of the US Market. EIA US. 84 PP. needs in Gabon”7.
2
FRMi 2018. Développement intègre et durable de la filière bois dans le bassin du Congo : oppor-
tunités, défis et recommandations opérationnelles. Rapport pays Gabon. 54 pp.
3
http://www.lenouveaugabon.com/une-agro-bois/2208-15142-transformation-du-bois-80-nou-
velles-usines-seront-ouvertes-cette-annee-a-la-zone-economique-speciale-de-nkok
4
AfDB (African Development Bank) 2018. Central Africa Economic Outlook. Abidjan, Côte d’Ivoire:
African Development Bank.
5
AFDB. 2018. Integrated and sustainable development of the timber value chain in the Congo 6
Lee White, Minister, Ministry of Water, Forests, Sea and Environment (Per. Comm). 2020.
Basin. Opportunities, Challenges and operational recommendations. Regional Report. 308 pp. 7
Kumar Mohan. Director General of the Gabon Special Economic Zone. (Per. Comm). 2020.

4 Performance of the Gabonese forest industry Performance of the Gabonese forest industry 5
 02 TIMBER PROCESSING AND TRADE 2.2 Secondary processing
From 2010 to 2019, the total Gabonese trade balance from primary wood
products was negative estimated at $154.32 million averaging 15.4 million per

T here are four distinct phases in the wood value chain: 1) the production of year (Figure 2).
rough timber in the form of logs; 2) primary processing consisting of sawing,
FIGURE 2: Trade balances for secondary processed wood products
veneering and slicing tropical logs, as well as the production of plywood; 3)
in Gabon 2010 to 2019 (US$*1000)
secondary processing including the drying and machining of solid wood ready for
the production of finished products such as wood for construction or builder 250000
wood (e.g. to make doors and windows), mouldings and wooden furniture; 200000

and 4) tertiary processing that leads to the manufacture of paperboards, case 150000

materials, cartonboards, household sanitary papers, newsprints, wrapping 100000

50000
papers and printing or writing papers, among many others. In Gabon however,
0
most wood production and export dwells on primary processing with huge -50000
negative trade balances associated with secondary and tertiary wood product -100000
groups. The total trade deficit over the period of ten years (2010 to 2019) for -150000
secondary and tertiary wood products is estimated at $218 million or $21.8 -200000
Builder Cane and Wooden Grand Total
million per year, which is a huge drain on an economy that is trying to mature. Woodwork Bamboo
Mouldings Furniture

Details of the analysis are provided below. Exports Value 4375 200 27334 1784 33693
Trade balance 19175 21263 2403 145178 188019

2.1 Primary production and processing Trade Balance -14800 -21063 24931 -143394 -154327

From 2010 to 2019, the total Gabonese trade balance from primary wood Exports Value Imports Value Trade Balance

products was a surplus of $5.19 billion averaging $519 million per year (Figure 1).

2.3 Tertiary processing

FIGURE 1: Trade balance for primary forest products in Gabon from
From 2010 to 2019, the total Gabonese trade balance from primary wood
2010 to 2019 (US$*1000)
products was negative estimated at $74.43 million averaging $7.4 million per
year (Figure 3).

6000000
FIGURE 3: Trade balance for tertiary processed wood products
5000000
in Gabon from 2010 to 2019 (US$*1000)
4000000

3000000
100000
2000000 80000
60000
1000000
40000
0 20000
Ind. Roundwood Plywood Sawnwood Veneer Grand Total 0
Exports Value 537618 346809 3040581 1262017 5187025 -20000
Imports Value 703 2968 2117 1503 7291 -40000
-60000
Trade Balance 536915 343841 3038464 12605014 5179734 -80000
-100000
Exports Value Imports Value Trade Balance
Household Printing and Grand
Cartonboard Case Materials Wrapping
and Sanitary Newsprint writing Total
papers
Papers papers

Exports Value 146 261 207 776 10819 456 12665

Import Value 5440 554 11200 5881 61815 2206 87096
Trade Balance -5294 -293 -10993 -5105 -50996 -1750 -74431
Exports Value Imports Value Trade Balance

6 Performance of the Gabonese forest industry Performance of the Gabonese forest industry 7
 03 INDUSTRIALIZATION, LAWS AND
REGULATIONS OF THE FORESTRY SECTOR

The Gabonese Ministry of Water, Forests, Sea and Environment is responsible

for the protection and sustainable management of forest ecosystems and for
ensuring the implementation of the policy on the industrialization of the timber
industry in the country. With the establishment of the Special Economic Zone
(SEZ) at Nkok, the Ministry is keen to increase the production of high value
products to diversify the economy, increase state revenues and create more
jobs, especially for young people. In the same vein, sustaining the timber
industry will require the expansion of forest plantations that will also generate
rural employment.
products that have undergone third processing where the export duty will be
As part of the ‘Green Gabon’ pillar of the Strategic Plan for an Emerging levied at only 1.5%8. This approach enables local processers to capture far more
Gabon, the country intends to process all its wood locally by drawing on value and profit.
dynamic native artisans and industry. To achieve these objectives, incentives
for industrial investment have been put in place and investment support and
preferential tax treatment for processed goods have been introduced as well
as the ban on exporting unprocessed logs. The decision in 2018 to ensure all
operators of forest concessions certify their forest areas by 2022, makes Gabon
the first country in the world to make certification mandatory. This decision,
together with the Gabonese policy prohibiting the export of logs in 2009, are
04 THE MAIN ISSUES AND CHALLENGES
IN THE FORESTRY SECTOR

testimonies to the national political determination to Experience from recent policy changes in the forestry sector in Gabon shows
transform the sector. In addition, a 20 billion CFA that opportunities for developing the natural resources sector in Africa rely
To achieve these
franc support fund to accelerate industrialization in heavily on the power of government policy. As Gabon seeks to develop its
objectives, incentives
the wood sector has been established. With these wood industry and move up the sector’s value chain under the Strategic Plan
for industrial investment
measures, the overall interest in Forest Management for an Emerging Gabon by 2025, the focus is firmly encouraged to dwell on
have been put in place
Certification (FMC) remains high in Gabon and the advanced secondary and tertiary wood processing. This will be likely to have
and investment support
possibility of getting an additional 2.2 million ha of the effect of reducing the export of primary wood products and increasing
and preferential tax
FMC forest concessions by 2020-2021 seems realistic. the production, national marketing and export of finished products. This will
treatment for processed
There is also a growing interest in chain of custody help to diversify the country's economy, increase state revenues and create
goods have been
(CoC) certification by industries in the GSEZ that more jobs. For instance, it is estimated that small-scale forest enterprises based
introduced as well as
will ensure value addition to wood products, and act on furniture and carpentry have the potential to add value of $44-271/m3 of
the ban on exporting
as a barometer to industrialization and encourage sawnwood processed to finished products and increase job creation by a factor
unprocessed logs.
the diversification of the Gabonese economy. of 4 to 12 times9. This implies that for the estimated 500,000 m3 of sawnwood
exported each year from Gabon, the potential value-addition for processing
More recently, the government of Gabon has passed new tax laws aimed at this volume to fine furniture could be in the range of $22 million to $1.56 billion.
encouraging further wood processing for export that will come into effect
for the forestry and timber in 2021. The export tax structure has been reset 8
ITTO TTM Report: 24:12 16 – 30 June 2020
to further incentivize local value addition. Products that have undergone first
processing will be subjected to an export duty of 9%, but where products have 9
Bickel A. and Cerutti P. 2017. Liberia: Domestic timber value chain analysis. Extractive Overview
undergone secondary processing it decreases to 3%, and drops further for Report. January. 53 pp.

8 Performance of the Gabonese forest industry Performance of the Gabonese forest industry 9
 Nonetheless, the problem facing Gabon is that the modern and well-structured illegal logging and poor governance. Any non-compliance to the forest laws
industries that supply international markets are mainly oriented towards primary in Gabon must have serious consequences for companies that are involved in
processing, which generates less value-added than the secondary processing corrupt activities. Incidents have included bribing officials to win the allocation
carried out by artisans using rudimentary tools, often working informally and of logging rights over hundreds of thousands of hectares of forest, operating for
poorly organized10. years without approved management plans, overharvesting thousands of trees,
logging prohibited species, exporting hundreds of thousands of logs beyond their
Opportunities for industrialization and economic diversification lie in the model allowed quota, and evading millions of dollars in taxes through sophisticated
established by the Gabon Special Economic Zone (GSEZ) at Nkok, which is an transfer pricing schemes14. A recent case reported on the large-scale smuggling
industrial complex for wood processing set up in the outskirts of Libreville. The of rare timber tree species such as Kevazingo (Guibourtia tessmannii) with the
zone is built on 1200 hectares of land concessioned to Olam, a private sector discovery and seizure of 353 containers at the Owendo Port in February 2019
company that officially opened in the country in 2014. The complex has a total in Gabon15.
tenancy of 104 companies, involved in wood milling into sawnwood, veneers
and plywood, production of furniture, mouldings and builder wood, glue and

05
varnishing. Companies located here come from China, Malaysia, Indonesia,
India, and the EU. CONCLUSION AND RECOMMENDATIONS

The establishment of forest plantation is weakly

developed, although the government recently The vision of the Gabonese government to develop its wood industry and evolve
The complex has a announced the planting of an additional 200,000 the sector’s value chain should be pursued vigorously with its single-minded
total tenancy of 104 hectares by 2025. This will create at least 15,000 to focus on secondary and tertiary processing. The major policy challenges for
companies, involved 20,000 jobs in the country and increase the country’s Gabon in processing forest products more effectively should be fast-tracked
in wood milling into wood production five-fold as well as increasing the by making the domestic market attractive, developing the processing sector,
sawnwood, veneers and contribution of the forestry sector to the economy modernizing production, overcoming skill gaps, increasing funding, boosting
plywood, production to more than €4.57 billion by 2025, compared to Gabon’s export market presence and avoiding the overexploitation of forests
of furniture, mouldings €762 million in 201911. A low log extraction rate of and environmental degradation16. To achieve these ideals the following will be
and builder wood, glue 11m3 per ha leaves Gabon exploiting only 25-50% of required:
and varnishing. its timber production potential. This is compounded
by low timber recovery factors of 30% for sawnwood i. the government should develop a complementary carpentry and furniture-
and 40-50% for veneers and plywood12. Moreover, making strategy to support the development small and medium scale
despite Gabon trading timber products with 19 other African countries, the forest enterprises (SMEs);
country`s intra-African trade share remains low at 5.7%13, which could be
ii. production clusters, incubators or technical centres for youth should
increased with regional integration efforts.
be promoted to build their capacity on technical, managerial, financial
and marketing skills, and support should be continued to the trainees to
The vision and outcomes desired by the government of Gabon to diversify
become independent minded entrepreneurs. This is important to offer
its economy and increase public revenue cannot be achieved without tackling
further assistance to the existing poorly developed 245 carpentry and
10
Kaplinsky R., Kaplan D. et Morris M. (2011), One Thing Leads to Another, Promoting Industriali- furniture-making workshops in Libreville, Owendo, Akanda and Ntoum;
sation by Making the Most of the Commodity Boom in Sub-Saharan Africa.
11
Inès Magoum. 2020. GABON:To develop full-fledged tertiary processing industry. Afrik21 News- iii. a national timber procurement policy should be developed to ensure
letter. Published on June 18 2020. https://www.afrik21.africa/en/gabon-to-develop-full-fledged-ter-
greater local content to avoid negative trade balances linked to the
tiary-processing-industry%E2%80%89/
12
AFDB. 2018. Integrated and sustainable development of the timber value chain in the Congo importation of finished wood products;
Basin. Opportunities, Challenges and operational recommendations. Regional Report. 308 pp.
13
Traore M. and J.C.Tieguhong. 2018. How Forestry Contributes to the African Development
iv. the promotion of regional timber trade should be prioritized as outlined
Bank’s High 5 Priorities: Challenges and Opportunities. Abidjan, Côte d’Ivoire: African Natural Re-
sources Center, African Development Bank.
14
EIA 2019. Op. cit.
15
EIA 2019. Op. cit.
16
UNECA 2016. Gabon Country Profile. 48 pp.
10 Performance of the Gabonese forest industry Performance of the Gabonese forest industry 11
 in the African Continental Free Trade Agreement (AfCFTA) to increase
intra-African trade in wood products;
v. alternative sources of raw materials should be created within the 1.5
million ha of available savannah land in the country for plantations of fast-
growing timber;
vi. adequate financing should be provided for the sustainable management and
certification of natural forests as well as certification for forest products;
vii. ways to use industrial wood wastes or residues should be explored as
well as promoting the use of lesser-known timber species;

viii. the experiences of the GSEZ at Nkok should be scaled up by creating

other centres with comparative advantages in Lamberene, Franceville and
Port-Gentil;
ix. small and medium scale enterprises (SMEs) based on key non-timber forest
products should be developed to introduce opportunities for women;
x. forest-based ecotourism in selected protected areas with high economic
potential should be developed;

xi. climate change mitigation and adaption as well as social and environmental
safeguards should be mainstreamed into the development of sustainable
forest industries;
xii. synergies should be built among sector ministries (forestry, trade, industry,
small and medium enterprises, commence, customs and related national
agencies) as well as with the private sector to ensure the development of
efficient public-private partnerships (PPP) that could help drive sustainable
industries.

There is a need for further detailed study on timber production by species

in forest management units (FMUs) in order to better inform policy makers
on options towards sustainability and good governance. This will involve some
comparative analysis of stocks in concessions versus authorized, authorized
versus production, production versus exports volumes per timber company.
Other issues to examine should include the policy framework guiding the
sustainable exploitation of timber, transportation, procedures in issuing
export certificates and the control and monitoring of export volumes17. With
sound knowledge of these issues better planning can be introduced to ensure
sustainable management of natural resources to ensure greater economic
resilience and inclusive green growth in Gabon.

Tieguhong J.C. 2009. State-of-the-Art of Pericopsis elata (Assamela) production and manage-
17

ment in Cameroon. ITTO/CITES. 61 pp.

12 Performance of the Gabonese forest industry Performance of the Gabonese forest industry 13
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14 Performance of the Gabonese forest industry