The Forestry Commission, led by the Chief Executive, Mr. John Allotey, has met with some chiefs and timber industry players to deliberate and review the Timber Stumpage fees.
The review became necessary due to the depreciation of the local currency and high inflation rates. The old stumpage fees had not been reviewed in the last six (6) years.
The Paramount Chief of Wassa Amenfi Traditional Area, who is also the Chairman of the Forestry Commission Board, and the Chairman for the meeting, Tetrete Okuamoah Sekyim II, stated emphatically that the review of the stumpage fees is long overdue, and has become necessary to be evaluated as things have changed since the last review.
He however expressed the hope that the meeting will yield fruitful results that will favor all the parties involved.
The President of the National House of Chiefs, Ogyeahohoo Yaw Gyebi II, an industry player, who brought greetings from “Nananom” all over the country, also expressed his delight to be a part of the deliberations. He advised that the deliberations be done in a peaceful and understanding atmosphere, and be guided by national interest.
The Chief Executive of the Forestry Commission, Mr. John Allotey, thanked the stakeholders for prioritizing the meeting. “It is good we have all parties present here to deliberate on this all-important issue, he said.
According to him, the revenue expected from the stumpage would be given to the appropriate parties so they get what is due them according to the laws governing the state.
The Administrator for Stool Lands, Mrs. Maame Ama Edumadze-Acquah, said her outfit is doing all that they can to meet the needs of the parties involved. According to her, the review of the stumpage fees is long overdue, and expressed her gratitude to be at the meeting, assuring them that she will relay all the deliberations and conclusions agreed upon to her team, for further discussions.
Mr. Richard Nsenkyire, the Chairman of the Forest Industries Association of Ghana (FIAG), mentioned that this is the first time all stakeholders have met after all the back and forth they experienced when it comes to stumpage fee review. He assured Nananom that the deliberations they will engage in is all geared towards working to ensure that they get what is due them.
The Executive Director of the Forest Services Division, Mr. Hugh Brown, gave a PowerPoint presentation on the “Review of Timber Stumpage Fees 2024”. According to him, stumpages are in two parts. 50% is retained by the FC and the other half is paid as royalties to chiefs.
Mr. Brown took all present through how stumpages are calculated, which he explained as the tree volume multiplied by the timber price which is then multiplied by the stumpage rate. The total gives you the stumpage fee.
He also ran them through the stumpage rate of high-demand timber species, moderate-demand species, and low-demand species, the current review, and the processes it has been through to the outcome of stakeholder engagement.
According to Mr. Brown, one of the key things that has affected the stumpage is the depreciation of the local currency and some of the difficulties the Timber Industry Association has faced in their businesses. This includes the impact of external inflation on the cost of machinery, and high and increasing operational costs, made up of fuel, labor, electricity, and forest protection.
He shared the revised stumpage fees and recommendations from the Forestry Commission. The Commission proposed a 50% increase in the current stumpage fees to be implemented effective 1st September this year. The Commission also proposed a thorough stumpage fee review process, which should be undertaken through a multi-stakeholder consultative process in the first or second quarter of 2025. He added that the Commission recommended regular annual reviews to be undertaken to progressively bring stumpage fees charged by the FC in line with the legal provisions under the law.
After the presentation, there were negotiations and discussions, among the Chiefs, Timber Industry players, and the Commission, to come to an acceptable conclusion that favours all the parties involved.
The CEO of the Ghana Timber Association (GTA), Nana Dwomoh Sarpong, appealed for a reduction of the stumpage fee increment from 50% to 30%. He pleaded with the Chiefs and FC stating that COVID-19 is still affecting the industry as they are still paying COVID-19 tax. He also called for the change of the effective date from the 1st of September to the 15th of September this year. According to him, the Timber operators are the real custodians of the forest since that is where they get their livelihoods.
From the deliberations, thoughts, and considerations, all parties agreed to reduce the proposed 50% increment to 40%, effective 15th September, 2024.
The Chief Executive in his concluding remarks, thanked the team from FC, for organizing the meeting. He also extended his appreciation to the Chairman, the President of the National House of Chiefs, the Administrator of Stool Lands, and the Timber Industry members. He also advised them on the need to work together in matters mutually beneficial to them.
The Chairman expressed his satisfaction with the happy ending of the deliberations and thanked all stakeholders for their contributions.
