African Natural Resources Management and Investment Centre Issues
In March 2024, the African Natural Resources Management and Investment Centre issued a new report, in English-only, “Regional timber-trade flows and trends in Africa”. The report offers guidance on taking full advantage of the timber trade in Africa.
Qualitative changes in the processing and trade of wood and wood products are being called for. The sector, which is linked to industrialization, offers numerous benefits for Africa, including job creation and increased investments and income.
Ms Kanziemo Leontine, a consultant in natural resource management at the African Natural Resources Management and Investment Centre, commented: “The Bank is keen to contribute to the general dialogue on issues in the timber sector in Africa through this study, which provides data on the timber trade, its prospects, and the role it might play in unblocking the potential for industrialization and integration in Africa. Moreover, the study sets out the actions needed to achieve these important targets.”
Many issues associated with the sector are identified in the report. “Further processing of wood products in Africa will contribute to the continent’s industrialization and increasing trade will promote the integration of African regions.”
An overview of the dynamism and models of Africa’s timber trade can help political decision-makers better understand the economic impact of the industry, which can support job and wealth creation, it points out.
The report’s major importance lies in the knowledge and data it presents and the long timeframe covered. Its detailed analysis of trade flows, trends and indicators cover 1990-2020 for four primary products, five secondary products, and six tertiary products. Trade flows were analysed over three ten-year periods in all African regions.
Between 1992 and 2020, the report finds a surplus in the total balance of trade values for primary products in Africa, with fluctuations between 1992 and 2008, followed by slumps in 2009 and 2012, representing deficits of around $156 and $45 million, respectively. Trade balances for secondary timber products recorded both surpluses and deficits over the same period, with the worst deficit in 2014, at around $3 billion.
There is a $65.6 billion deficit in the total trade balance for wood and wood products in Africa the report notes, indicating that African countries are spending a lot more on importing these products than they receive from exporting them. Export and import flows for primary, secondary, and tertiary wood products to other parts of the world also vary among the regions. Regarding trade openness to the forestry sector, Cameroon, the Central African Republic, the Republic of Congo and Gabon all feature in the top ten.
The trade imbalance has a negative impact on the industrialization and competitiveness of the timber industry in Africa and on the financial stability of national economies. The report indicates several avenues for changing the situation.
Improving the timber trade in Africa depends on harmonizing trade policies and regulations, easier access to trade financing, greater private and public investment, creating trade-related infrastructure, ensuring access to trade information, and strengthening production capacity. Successfully implementing the African Continental Free Trade Area offers the main opportunity to improve the timber trade.
African governments must demonstrate genuine political will, backed by technical and financial assistance from the regional economic communities and the African Union. The multilateral development banks and other donors should support investments to expand wood product processing capacities in the main producing countries and back the establishment of a marketing information system for wood products across the continent.
