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Library Small and medium forest enterprises in Mozambique

Small and medium forest enterprises in Mozambique

Small and medium forest enterprises in Mozambique

Resource information

Date of publication
November 2009
Resource Language
ISBN / Resource ID
978-1-84369-518-9
Pages
58
License of the resource

Natural forests and other types of woody vegetation cover 55.3 million hectares of
Mozambique’s total land area. Of the total forest, 67% is suitable for timber production. This represents a substantial commercial resource which forest enterprises could use to help achieve the aims of Mozambique’s Action Plan for the Reduction of Absolute Poverty (PARPA) in a country where 70% of the population lives in rural areas.

Forest enterprises are flourishing in Mozambique in various shapes and sizes. This paper defines small and medium forest enterprises (SMFEs) as forest industries with not more than 50 employees (although there are a range of different definitions used within the country). Our estimates suggest that SMFEs comprise 95.8% of the formally registered enterprises in the forest sector, and more than 99.9% of the total if you include informal enterprises.

SMFEs also account for more than 80% of the employment in the forest sector.
Forest enterprises in Mozambique can be registered as limited companies, partnerships or sole traders. While some larger companies opt for limited company status, most formal SMFEs are registered as sole traders because registration is much simpler. But because many do not perceive the benefits of formal registration to outweigh the costs, there is also widespread informality, estimated at 90.9% in agriculture and forestry. Some unregistered SMFEs still manage to apply for formal forest use rights. Conversely, many formally registered
enterprises do not comply with all relevant legislation.

At present, there are only two formal channels through which SMFEs can acquire commercial timber rights: forest concessions (FCs) and simple licences (SLs). FCs are generally held by large forest industries operating over 50 year renewable timeframes. FCs up to 20,000 hectares in size are approved at the provincial level, FCs ranging from 20–100,000 hectares are approved by the Ministry of Agriculture and those above 100,000 hectares are overseen by the Ministerial Council. Fulfilling demanding inventory and management plan requirements, plus investments in processing capacity are pre-requisites to being awarded a concession. SLs are much simpler annual licences for extraction of up to 500m³ of timber, ostensibly from mapped areas using simple management plans. SLs are approved at the provincial level. Unsurprisingly, in 2006 there were only 126 FCs of which 63 had approved management plans, while more than 630 SLs were in operation, held mostly by SMFEs.

Neither of these formal channels for commercial timber use is doing much for poverty reduction. FCs and SLs offer the rural poor little more than low paid menial labour, often without contracts or adequate health and safety measures. Only a couple of community groups have successfully managed to obtain SLs for timber production. Potentially much more significant is the large number of rural people who supply timber informally either to FC or SL holders or to middlemen or local carpenters.

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Authors and Publishers

Author(s), editor(s), contributor(s)

Nhancale, B.A., Mananze, S.E., Dista, N.F., Nhantumbo, I. and Macqueen, D.J.

Geographical focus