Forest industry in Ghana: A Socio-economic appraisal

Abstract

The forest industry is important to Ghana’s economy. It contributes over 5% to national Gross Domestic Product (GDP) through export of timber and wood products which ranked third as foreign exchange earner, after cocoa and minerals. For this reason, it is pertinent to appraise and understand the socio-economic dynamics affecting timber flow and market so as to sustainably manage the forest base. The socio-economic factors examined include mill location and structure; mill age, size and capacities; ownership and shareholdings; sources of finance for investment and re-investment; mill production efficiencies; local and export market potentials. Timber companies in forested regions of Western, Eastern, Brong Ahafo and Ashanti were surveyed and field data collected through interviews schedules, use of structured questionnaires, personal observations, expert interviews as well as desk studies. Results showed that the small-scale wood processing firms, which are in the majority, are owned by indigenes but are gradually folding up due to difficulties in raising capital to meet the need for mill expansion and technology improvements. This category of firms found it difficult to meet high quality standard requirements of consumers. In contrast, the integrated large companies, owned by foreigners, are more attractive and qualitative in their product delivery. This group of companies possesses larger economies of scale and control about 70% of the export market. They also utilize contemporary machines and equipments that enhance their ergonomics of operation. It is conjectured that thorough knowledge of the socio-economic indicators is central to effective forest resource management in the face of increasing pressure to utilize and encroach on the available forest base.