Hidden forestry revealed: Characteristics, constraints and opportunities for small and medium forest enterprises in Ghana

The forest sector in Ghana is the fourth largest foreign exchange earner for the country. The main contributor is the formal forest sub-sector, consisting of regulated industries in timber and timber products. The informal sub-sector, characterised by small and medium forest enterprises (SMFEs), has been largely left out in forest planning and management even though it represents an income source for about 3 million people. This report reviews the status of SMFEs in Ghana. It provides information on the various issues the sector confronts, and identifies mechanisms for harnessing the potential of SMFEs to effectively contribute to poverty reduction and sustainable forest management in Ghana.

SMFEs operate both in urban and rural areas, sometimes with complex production and
marketing chains. Generally, the workforce in the SMFE sub-sector is composed of proprietors,
family members, paid workers and trainees or apprentices. Proprietors, mostly women
(especially in Northern Ghana) generally have low levels of education. Most SMFEs are
seasonal in nature, with factors like fluctuations in demand, raw material and labour availability
determining the period of engagement in the various activities. However, proprietors involved
in manufacturing/processing and trade who have workshops or permanent locations operate
full-time and on a commercial basis. Most proprietors operate in isolation and existing
associations are mostly inactive. There exist linkages between the SMFE sub-sector and the
formal forest sub-sector. For instance, some charcoal producers depend on sawmills for their
supply of raw material in the form of off-cuts, slabs and other wood residues, and some
chainsaw millers deliver their lumber to conventional sawmills for further processing.

There are ongoing international initiatives that have implications for SMFEs in Ghana. Key
among the initiatives are the Voluntary Partnership Agreement (VPA) under the Natural
Resources and Environmental Governance (NREG) programme in Ghana, and the Reducing
Emissions from Deforestation and Degradation (REDD) initiative. Efforts must be made to
utilise opportunities offered by these initiatives and deal with the challenges presented by
them. For instance, the VPA, which promotes legality of enterprises, has the potential to put the
mostly informal and unregistered SMFEs out of business. This situation could be avoided if the
definition of ‘legality’ is broadened enough to include the interests of SMFEs. This may require
a review of some of the current forest policies and legislation. Isolated SMFEs may also need
to be organised into associations and assisted to register their enterprises and conduct their
operations in a legal and sustainable manner.

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