22 January 2013

Ghana: Inadequate Lumber Supply Delays Western Region Theatre

With the looming economic boom in the Western Region, specifically the Twin-city of Sekondi-Takoradi, as a result of the discovery of Oil & Gas, there is the need for a regional theatre to meet the entertainment needs of residents and the increasing population.

However, the Western Regional Theatre, which is supposed to serve the purpose, has been under construction for the past 22 years, denying beneficiaries the economic benefits, and leaving them as squatters, scattered in makeshift premises all over the city.

Ghana was the first country to enter into the Voluntary Partnership Agreement (VPA) with the European Union. Even though the VPA is mainly a trade agreement concerned with legality of timber exported to the EU, it also involves legality of timber traded in the domestic market.

Under article 20 of the agreement, each party is under obligation to submit an annual report including actions taken to prevent illegally-produced timber products from being exported to non-community markets or traded on the domestic market.

This means that Ghana cannot pursue measures to ensure the trade of legal timber to the EU, without meeting obligations to ensuring that the domestic market also sells legal timber, and stakeholders in the industry believe this has contributed to delaying the non-completion of the western regional theatre in the past two decades.

Also, the policy framework for procurement and quality control of timber products in the domestic market is fragile, even though section 22 of the Public Procurement Act, 2003 (Act 663), requires that only certified sawn lumber from recognized sawmills are allowed for use in the projects of Ministries, Departments and Agencies.

Again, the Forest and Wildlife Policy of 1994 makes explicit provisions for supplying quality and adequate industrial timber to the domestic market.

The Timber Resource Management Act (Act 547) and LI 1649 further gave legal backing to the policy aspiration by authorizing the minister responsible for forestry to, from time to time, review the situation and give directives for the supply of industrial timber to the domestic market.

At the moment, the prevailing directives are that some sawmills be given special permits to process timber solely for the domestic market and for Trades Union Congress holders to supply 20% of their production to the domestic market.

Currently, about 84% of lumber available at the domestic market is supplied by chainsaw operators - - it has to be established here that perhaps the most difficult impact of a full VPA regime will be the volume of timber that can possibly be available to lumber traders to trade on the domestic market.

This is because, legality standards require that timber exploitation should be within official annual allowable cut limits and that no illegal logging or milling should be permitted.

This means that chainsaw operations which supply about 84% of lumber traded on the domestic market will be cracked down and that the maximum allowable cut may be as low as 780,000 m3 and as high as 2 million m3.

Some of the challenges that are likely to confront industry players and traders if measures are not put in place to mitigate it are, loss of employment and livelihood, shortage of some species of lumber on the domestic market and delays in receiving supplies, thus, locking up the capital of traders.

High start-up capital since sawmills mostly require full payment before consignments are delivered, high prices of sawmill lumber, perpetration of chainsaw activities as well as extortion of moneys from lumber traders by enforcement agencies are also some of the challenges.

Speaking to Western File in an interview on the situation, the Chairman of the Apremdo-Kwesimintsim Wood Workers Association, Mr. Thomas Cudjoe, recommended that government and other agencies involved in the VPA agreement must as a matter of priority and urgency address local problems involved in the domestic lumber trade.

"The inadequate lumber supply by sawmills on the domestic market must be adequately addressed. For this reason, the current regulations on the supply of lumber to the domestic market must be fully enforced and even adopt measures to give priority for the domestic lumber supply" he said.

He noted that the high prices of lumber from sawmills is also a disincentive to traders in the product, and this can be partly attributed to the high price in the export market.

He pointed out that to ensure the successful implementation of the agreement therefore, measures must be put in place by the government to protect traders and consumers from such high prices.

He said the association, with support from Business Advocacy Challenge Fund, is calling for the enforcement of the law on quota supply of lumber by sawmills to local market.

"The association must re-organize itself and bring all fragmented groups under its umbrella in the Western Region to consolidate its front; there is the need for the association to pursue a coalition formation exercise in regions with low involvement in the association's activities such as the Ashanti and Eastern Regions in terms of membership drive for support for the advocacy action and future ones", he added.

Mr. Cudjoe noted that the association must be structured and run professionally by engaging permanent professionals to run secretariat or network with professionals who have the technical knowhow to assist the political heads of the association in their decision making process.

He added that such an effective and efficient running of the association will make it a disincentive for those who would refuse to join.

"The association should form partnership with the trade associations in the downstream business in the industry to achieve maximum effect in advocacy and dialoguing with government and other agencies involved in the signing and implementation of the agreement", he said.

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