Tatiana Brown

EKHK31

August 2013

Policy and Regulation Effects on the Timber Market:

A Case Study of Ghana

Based on the timber export sector of Ghana, and in particular, export to the European Union.

Lund University

Department of Economic History

Examiner: Prof. Benny Carlson

Supervisor: Erik Green

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Table of Contents

1. Introduction 1.1 Objective

1.2 Previous Research

1.3 Theory

1.4 Hypothesis

2. Method 2.1 Approach

2.2 Data

2.3 Variables

2.4 Classification

3. Historical Background of Ghana 3.1 Post-Independence

3.2 1980, the Economic Recovery Program and the World Bank Timber

Rehabilitation

3.3 1990

4. Regulation and Policy changes and their effects on the export of

timber

3.1 Regulation and Policy Change by Ghana

3.3.1 Forest Policy

3.3.2 Bans

3.3.3 Ghana Investment Code 1985

3.3.4 TIDD

3.3.5 ERP years

5. Regulation and Policy changes (EU/ECC)

5.1 Regulation and Policy Changes by the EU

5.1.1 The International Tropical Timber Agreement 1983

5.1.2 The International Tropical Timber Council

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5.1.3 Eco Labeling

5.1.4 The UK Timber Procurement Policy

5.1.5 The FSC

5.1.6 The ERP revisited

5.1.7 FLEGT and VAP’s

6. Empirical Findings6.1 African Timber Production and Export

6.1.1 Export and Value

6.1.2 Exports of Timber from Africa to Europe

6.2 The Impact and Effects of Regulation and Policy by EU on the Production and

Export of Timber.

6.3 The Increase of Exports after Ghanaian Regulation and Policy Changes

7. Analytical Discussion

8. Bibliography8.1 Literature and Articles

8.2 Other Literature

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1. Introduction

1.1 Objective

This study analyzes the economic effects of environmental regulation. More specifically I will

analyze the economic impact of environmental regulations of the European Community on

Ghana’s timber export sector. As with many developing countries, Ghana relies heavily on the

extraction of its natural resources, such as minerals, forests, and agricultural land to meet its

economic growth and other social development objectives.1

Tropical forests are rapidly disappearing as tropical countries develop the value-added sectors

of their forest industries.2 Recently, the study of economics has been swayed to take into

consideration environmental factors, as well as the growing impact of the European Union

Market. Deforestation is the main cause for environmental debate today. The problems and

impacts surrounding illegal logging and the export thereof have amplified, causing an increase

in regulation from the importing countries. The pressures of environmental sustainability

come from both the importing countries as well as the EU itself. These pressures are having

great effects on the timber production companies, with the majority situated in economically

unstable and export-dependent countries. For over 40 years, Ghana as well as other African

countries have exported their timber primarily to European countries, resulting in a good

source of income for the Ghanaian economy. The European Community and the European

Union have implemented regulations and policies for the sustainability of forests, controlling

the types and amount of timber exported and in turn the price of timber.

Since 1981, the annual rate of deforestation in Ghana has been two percent per year or 750

hectares each year.3 Since 1994, the export quantity of roundwood and industrial tropical

roundwood has decreased dramatically. Why has Ghana’s timber export declined since 1990?

In order to answer this question, this thesis will use empirical evidence that suggests European

regulation implementation affects the quantity of timber exported to Europe.

To understand the effects, one must analyze the historical data up until 2012 and see where

patterns and trends have occurred in line with changes of regulations. I have used Ghana as a

case study to show more specific data and as an example of how Europe can mildly control

1 David M Nanang, Analysis of export demand for Ghana’s timber products, 2008.2 C Denis Ingram, Historical Price Trends of non-coniferous Tropical Logs and sawnwood Imported to the United States, Europe and Japan.19933 Anonymous, TED case studies, Ghana Forest Loss.1997.

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timber export from developing countries. Ghana is also a good example of a developing

country not reliable on oil export and, more importantly, reliable on timber export.

Furthermore, in 2009 Ghana was the first African country to sign a voluntary partnership

agreement (FLEGT) with the EU to export only legally harvested timber to Europe. With this

as an example of timber regulation with Africa, I decided to focus on Ghana and analyze its

exporting history with Europe.

The European member states during 1970 to 2012 have been chosen in this thesis since they

are one of the biggest importers of timber in the world, particularly from African developing

countries. Ghana is a perfect example of a primarily export-based economic community. It

has also been the largest exporter of timber and tropical hardwood to Europe, until recent

years.

Furthermore Ghana is a country in Africa which shows reliable data in relation to oil export,

which could affect both the data collected as well as the economy in itself. Despite oil being

discovered in 1970’s, it was insignificant to the economy up until 2009.

1.2 Previous Research:

I have looked at Ghana as a whole, involving political, social and economic circumstances

pre-independence and post-independence. This is to give my research and understanding of

Ghana a broader scale and not just to focus on the export sector.

1.3 Theory

According to Stigler, the Theory of Economic Regulation states that a regulator faces special

interest pressure from producers and electoral pressure from consumers. 4 Furthermore, he

suggests that there are two ways to help a producer; via a direct subsidy or via protectionism.

Regulators favor a protectionist method of limited entry to the market. Therefore protective

regulations like tariffs, licensing, fees and other economic instruments are used. He also

suggests that within this theory, regulators receive the gains, despite the producers assuming it

is to their advantage. This is contrary to my thesis.

The purpose of discussing this theory is to show the different perspectives on regulation. In

this case, regulation is causing a negative impact on the economy of Ghana and reducing its

4 Stigler. 1971. The theory of economic regulation. Bell Journal of Economics and Management Science 2 (spring): 3-21.

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export of timber. I will show that EU regulation is reducing the amount of timber export from

Ghana and through this regulation protectionism on the timber market occurs.

Strategic theories of protection argue that countries strategically alter trade flows in order to

gain some kind of market advantage. Magee, Brock and Young (1989) suggest a hypothesis

that protection is targeted towards disadvantaged groups.5 In general, an increase in a

country’s terms of trade causes the equilibrium of protection to rise and the export subsidy to

fall.6 It has been claimed, for example, that trade between two countries with different levels

of environmental regulations will lead to the low regulation country specializing in pollution

intensive production.7

The effects of regulations and the impact of regulators can have a negative impact on

economies and markets, especially when considering environmental policies. The intention of

an environmental policy or regulation is to ensure the sustainability of a resource, not

encourage more production of the resource. The Austrian School of thought has supported the

idea that regulations are problematic and that regulations will have unintended consequences.8

Regulations, as I suggest in this thesis, are restricting the export of timber out of Ghana.

Cordato even writes in notion of using Austrian theory in environmental economics.9

In my thesis I will also use economic theory to show how the demand of a commodity reacts

to its price. According to economic theory, if the price or value of a commodity increases the

demand for the commodity will decrease.

1.4 Hypothesis

For this thesis I will attempt to show that the export of timber is affected by the regulations

and policies by Europe through empirical evidence, using economic theory as my foundation

for research, and tying links with the Austrian school of thought. When the regulations and

policies are implemented the data will show an increase in the price of timber and a decrease

in the amount exported. The regulations and policy changes are therefore variables. The value

of production and export of timber are the initial factors.

5 Magee, Stephen P, William A. Brock, and Leslie Young, (1989), Black Hole Tariffs and Endogenous Policy Theory (Cambridge University Press) 6 Magee, Stephen P, William A. Brock, and Leslie Young, (1989), Black Hole Tariffs and Endogenous Policy Theory (Cambridge University Press) pp.157.7 Baumol and Oates 1988, The theory of environmental policy8 Roy Cordato, 2004, Toward an Austrian theory of environmental economics, The Quarterly Journal of Austrian Economics (3-16)9 Roy Cordato, 2004, Toward an Austrian theory of environmental economics, The Quarterly Journal of Austrian Economics (3-16)

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The Ghanaian economy is dependent on its timber export sector. This analysis will therefore

show the production, price and export of timber before European regulations were

implemented, showing low timber prices, and large export quantities. Then the analysis will

show the production, price and export of timber after European regulations were

implemented, showing higher timber prices and smaller export quantities.

Regulations implemented by the Ghanaian governments and Forestry Departments described

in this analysis will show how, on the other hand, local government regulations have

increased timber export quantities, reduced the prices of timber and in turn encouraged

economic growth.

2. Method

2.1 Approach

The approach in this thesis is to firstly understand the timber market in Africa and thereon the

timber market of Ghana, together with an overview of the Ghanaian economy from post-

independence to today. Thereafter I have focused on the regulations and policies implemented

by firstly the Ghanaian government, and secondly by the European Community. With this

analysis of the regulations covered I attempt to show the patterns of timber export after the

regulations or policies have been implemented or changed, with the use of diagrams taken

from databases, literature analysis and an interview from a large timber company in Ghana.

To gain an understanding of the economic patterns and of timber export to Europe and to

show the decrease in timber export from Ghana I have used three different ways of collecting

information.

2.2 Data

Within my empirical findings, my primary quantitative data is collected from statistical

databases such as World Bank and FAOSTAT Forestry, the Forestry Commission of Ghana,

as well as the European Commission for facts on regulations and policies on timber import.

Reliable articles and literature have allowed me to attain historical data since it is difficult to

find within databases, especially in terms of demand for wood products, where little to none

has been documented. Quantitative data has been displayed in diagrams to show patterns of

timber value and timber export. This method of approach has also been useful by allowing me

to specify different species of timber. Using economic theory to interpret my empirical

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findings I can show how the price of timber correlates to the export of timber. The period of

1961 to 2012 has been selected for the understanding of timber export as a whole; however

the period of 1990 to 2012 has been selected when discussing the effects of EU regulations

and policy changes since the majority of changes occurred during this time, as well as the

period of 1980 to 2012 when discussing the effects of Ghanaian regulations and policy

changes. Furthermore it allows the reader to be capable of analyzing the difference between

timber value and export before and after these changes.

Secondary data has been carefully selected from literature, the majority of which is qualitative

data in consistency with policy and regulation implementation, as well as showing their

effects.

After showing the collection of data and empirical findings, I will show that my hypothesis is

satisfied through my analytical discussion.

2.3 Variables

The changing factors in this thesis are the regulations implemented. I have used those by the

Ghanaian government and those by the EU to show the contrary effects of regulations

implemented.

There are several variables which could have had an effect on the result but have been ignored

in this thesis: 1) the global competitive market, with several other countries producing much

larger quantities of timber for export, for example China, 2) Employment within the timber

sector in Ghana, which could have an effect on the timber output and hence export.

Furthermore employment within timber firms could be dependent on outside factors such as

wages set by locals, private owners or the government or geographical location of timber

firms throughout the period 1970 to today. This is covered in more advanced research, for

example by Owusu 2001. The employment of expatriate staff, however, is mentioned later

under The effects of the ERP. 3) Consumption of wood products within the EU. There is very

little research on how the consumption of wood products is linked to deforestation, even less

so when there are so many other factors involved in the consumption. In 2008, the European

Commission tried to address this lack of information.10 The Environment Council, the

European Parliament and the Economic and Social Committee have since then urged support

for a study in the relationship between consumption and deforestation. Lastly 4) technological

10 European Commission Document, Second strategic review of better regulation in the European Union, 2008.

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change or shift in consumer patterns. The rising use of replacement products such as plastic,

have changed the way the consumer buys wood products.

2.4 Classification

The European Economic Community will be called as such in this analysis between the

period of 1980 and 1990. Any discussion on the European Community thereafter will be

referred to as the European Union. This is due to the constant changing number of European

member states throughout the period of 1960 to 1990, and thereafter. The countries which

were included in the ECC during this time have been the six founding nations (Belgium,

France, Italy, Luxembourg, the Netherlands and Western Germany), 1960’s joining members

(Denmark, Ireland and the United Kingdom), 1970’s joining members (Greece) and the

joining members of the 1980’s (Portugal, Spain and Turkey).

All African countries used in the first part of the study apply apart from Algeria, Libya,

Egypt, Nigeria, Gabon, Congo and Angola. These countries have had oil as their largest

export income between 1970 and now, and are omitted since agricultural produce are not their

largest source of export income in comparison to countries such as Ghana.

In this report it is critical to determine the types of wood to be used in the analysis. About

90% of Ghana’s exported timber products are sawnwood, veneer and plywood. These will be

referred to as tropical timber products. Tropical timber is defined in the International Tropical

Timber Agreement (1994) as non-coniferous tropical wood for industrial uses, which grows

or is produced in the countries situated between the Tropic of Cancer and the Tropic of

Capricorn. The term covers logs, sawnwood, veneer sheets and plywood. Plywood which

includes in some measure conifer trees of tropical origin shall also be covered by the

definition.11 Tropical plywood is often a mix of tropical woods and is much more attractive

for consumers since it is denser and more weather resistant than indigenous wood or the

structure of wood from moderate climates. Roundwood is compiled of sawlogs and veneer

logs and in this analysis I have used roundwood as the subject for data when applying

sawnwood and veneer sheets. However, I have applied sawnwood and veneer sheets

separately in a few diagrams to show more specific export and value data. Within the EU,

supplies of wood-based raw materials of adequate quality can be imported at competitive

11 FAOstat, Forest Products Definitions.

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prices and the EU is a net importer of these products - the two main types of such imports

comprise roundwood as well as pulpwood.12

3. Historical Background of Ghana

3.1 Post - Independence

Ghana has for many years been a promising African country, however since becoming an

independent country from being a British colony in 1957 Ghana experienced many difficulties

in trying to maintain its economic growth. Cocoa production, its main export and largest

export earner in the mid 1960’s, collapsed due to high foreign debt and competitive markets,

similarly to timber production.

An important pillar of the timber industry in Ghana was the start of the TIDD (Timber

Industry Development Division), which originates from a variety of attempts during the

1960’s to manage Ghana’s timber resource. These ideals cumulated in the establishment of

the Ghana Timber Marketing Board (GTMB) in 1963 to regulate the export of timber and

wood products.13

This accumulating foreign debt decreased log production with a decline of 66% between 1970

and 1981.14 At the same time, the government invested heavily in infrastructure in the

industrial sector in order to allow Ghana to reach a stage of industrialization. By 1971 there

was an attempt to devalue the Ghanaian Cedi currency, however this did not occur until 1983,

and so the Cedi remained high.

3.2 1980, the Economic Recovery Program (ERP) and the World Bank Timber

Rehabilitation

In 1980 Ghana’s GDP was at US$ 25.956 billion compared to its current US$ 40.71 billion

(2012).15 In 1985, GDP fell dramatically to US$ 8.046 billion.16 Exports fell from US$ 130

million in 1973 to US$ 15 million in 1983. This fall continued to 1986. In 1984 the World

Bank announced that it would institute an ERP. This was largely aimed at benefitting the

12 European Commission, Agriculture and Rural Devlopment, Forestry Measures 06-01-2010. Ec.europa.eu13 Forestry Commission of Ghana – TIDD. www.fcghana.org/TIDD

14 Federal Research Division of the Library of Congress.. The Country Studies Series, Published 1988-1999.

15 Trading Economics, Ghana16 World Bank.org GDP Ghana

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export sector, boost the economy and furthermore reduce foreign debt in the long term.

Thereafter, Ghana showed steady growth. Export volumes of goods only (% change) for

Ghana in 1980 were -14.8%.17 Not only did the World Bank encourage stability but also

encouraged reforms to enable steadier trade through reduced import duties and taxes on

trades. The reforms also allowed farmers to keep a larger amount of their foreign exchange

earnings that previously in an attempt to encourage saw mills and exporters to keep supply

unchanged. In 1989, the Export Development and Investment Fund established. The World

Bank also enabled a timber rehabilitation credit to Ghana for US$ 24 million to ensure that

the exports of timber kept at a steady pace, after seeing the importance of the timber export

sector for Ghana. After this, log production rose 65% between 1984 and 1987. Export

revenues increased shockingly 665% between 1983 and 1988. All looked promising for

Ghana after the World Bank initiated the ERP. However, shortly after this, by 1988, Ghana

saw decreasing export revenue, decreasing log production, and a turn of events politically.

The ERP would ensure that production and export would increase, with heavy investments in

machinery and the industrial sector, however the rise of this foreign debt in turn would later

decrease the timber production and export. Not only did the policies attached to the ERP

increase the external debts, but also increase inflation rates. Since the ERP projects were

foreign investments, the Ghanaian government repeatedly devalued the country’s currency to

raise producer prices for exports and to encourage production, but devaluation also led to

price rises on all other goods as well.18 Export volumes of goods only (% change) for Ghana

in 1985 were 35.107% in comparison to 22.495% in 1990.19. The export value of timber,

along with this decreasing export revenue, plummeted the years prior to the ERP and steadily

rose in the years after (see diagram 2).

3.3 The 1990’s

Trade continued primarily to the European Community, with Germany taking 19% of all

Ghanaian exports.20 Since the initiation of the Forest Resource Management Project, part of

the ERP, started in 1988, Ghana too, wanted to start controlling and managing log production.

In 1989 the government banned 18 species of timber for log exports. This tough decision

17 http://www.economywatch.com/economic-statistics/Ghana/Export_Volume_Goods_Percent_Change/

18 http://www.mongabay.com/reference/country_studies/ghana/ECONOMY.html19 World Bank.org Export Volumes Ghana20 Federal Research Division of the Library of Congress. The Country Studies Series. Published 1988-1999

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encouraged sustainable and environmentally friendly timber exporting. Furthermore, shortly

after this ban, the government also imposed high duties on other species.

Despite Ghana’s complex land tenure it is important to note here that Ghana does not have a

monopoly on forest species, however are able to adopt bans or laws on species no matter to

whom the land belongs to.21 Tenant farmers are however allowed to harvest trees for their

own use, but not for commercial purposes.22 Therefore the government was able to impose

these policies for the benefit of forest sustainability, and not for economic purposes, as a

monopoly would otherwise have done. The land owners, tenant farmers and the government

often resolve disputes over forest and land-use.

By 1991, wood products rose to 20% of export earnings accounting for 6.9% of volume

exports.23 Despite this vast increase in export earnings, the actual sales of logs decreased to

23% of export earnings in 1990, compared to 55% mid 1980’s.24 However, the price of timber

had increased.25 This pattern of high price for timber and low sales reflects the one of many

clear regulatory changes supporting the hypothesis. In 1995, there was a complete ban on

unprocessed log exports, which was one of the most affecting changes on the timber export

sector. The export value of roundwood for Ghana was 0 between 1995 and 2003.26

Although the 1990’s provided more economic stability from the timber export market,

unfortunately there was a gradual decline all in all. In the 1980’s the ambition was achieve a

fast effect and boost the economy through changes in reforms and in policies for export. Some

critics have suggested that the government put pressure on the timber companies, and took

advantage of the rising price of those species not banned, in order to gain profit and put

capital back into the Ghanaian economy.

Illegal timber logging also became a growing problem during the 1990’s, whether it were to

the growing concern of consumers, or of governments. Illegal logging has contributed to the

reduction in the forest covers of Ghana, undermining the resource base of the timber industry,

loss of revenue to land owners and government, as well as the degradation of the

21 www.growingforestpartnerships.org/sites/gfp.iiedlist.org/files/docs/ghana/ghana_land_tenure-gfp_project.pdf, (Lavigne-Delville, 1998).22 http://www.fao.org/docrep/003/ab567e/AB567E01.htm

23 Federal Research Division of the Library of Congress. The Country Studies Series. Published 1988-199924 Federal Research Division of the Library of Congress. The Country Studies Series. Published 1988-1999

25 Federal Research Division of the Library of Congress. The Country Studies Series. Published 1988-199926 FAOstat – forestry, 2013.

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environment.27 For this reason, the EU and Ghana would later try to reduce illegal logging

through different policies and regulations, such as FLEGT VAP, in accordance with Ghana’s

Forest Policy 1994.

4. Regulations and Policies on Timber Logging and its Export (Ghana)

4.1 Regulation and Policy Changes in Ghana

The analysis of regulations implemented by the Ghanaian government is to show that it has

not caused a negative impact on the timber export, instead that is benefitted the timber export

sector. This will furthermore support my hypothesis that it was European regulation that

decreased timber export.

To some extent there was a preference to collaborate with African countries on Europe’s

behalf. Europe (Germany, Netherlands and the UK) had experienced a vast increase of

imported timber during the period of the Economic Recovery Program (ERP). As previously

mentioned, Germany was one of Ghana’s largest importers. The declining timber production

during the late 1970’s and early 1980’s was hardly the result of a deliberate policy to reduce

timber harvest, rather it was a result of a general economic decline in Ghana.28 The export of

Ghana was doing so well by the end of the 1980’s that in 1991 Ghana was able to make loan

repayments. Strapped for cash, one of the fastest ways to earn foreign exchange was to sell

timber at an unprecedented rate on the world market.29

To look further into the issued raised, I have looked at several regulations implemented by the

Ghanaian government, and an analysis on the effects on the timber market follows the

regulation or policy description.

4.1.1 Forest Policy

In the history of the Ghanaian timber sector, there have been two policies which called for

control and management. The first being the Forest Policy 1946, approved in 1948, and the

second being the Forest Policy 1994. Not only does the almost 50-decade gap between the

two suggest little change in the government mind-set, but it also means that the 1994 Forest

Policy was to make a large impact on the timber sector, or rather that there were no obstacles

27 www.fcghana.org, Background to VPA28 Analysis of export demand for Ghana’s timber products: A multivariate co-integration approach DavidM.Nanang, Journal of Forest Economics, accepted 2009, p19.29 Ted Case Studies, Ghana Forest Loss, , http://www1.american.edu/ted/ghana.html

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for exploitation before regulations were introduced. The policies imply a focus on

management in timber production and not for sustainability, emphasized by the 1948 policy

stating that Ghana required a sustained supply of timber for the industry, which resulted in a

serious reduction of forest in the land area. This is emphasized by the Minister of Forestry of

Ghana who stated that it became obvious that most of the provisions in the old policy could

not adequately deal with the totality of the emerging issues.30 It is clear that the Ghanaians had

taken advantage of its timber industry and used it to the point where change was necessary.

The Forest Policy of 1994 addressed the urgency of sustainable forest management. The

impacts of the first policy ultimately contributed to the increasing growth in numbers of the

timber industries in the 1970’s.31

4.1.2 Bans

In 1979, 14 timber species were banned from export in log form.32 The Ghanaian government

sought to manage the deforestation and control the demand of timber from importing

countries. The list was increased to 18 in 1989.33 Later the government placed high duties on

other species in order to increase their value as export products.

4.1.3 Ghana Investment Code of 1985

This Act intended to encourage foreign investors who were looking to exploit Ghana’s natural

resources, whilst Ghana was experiencing economic growth and international credibility. It

also included a 25% reduction on export taxes for lumber and value added products.34 For

this, the firms were given incentive packages under the investment code to encourage exports

– the more a firm exported, the greater the benefits it enjoyed. This too was another way the

government encouraged export of timber during the 1980’s in order to increase domestic

capital accumulation.

4.1.4 Timber Industry Development Division (TIDD)

30 DR KWABENA ADJEI, Minister of Lands and Forestry, Forest Policy 1994, www.fcghana.org

31 Birikorang, G. 2001. Ghana Wood industry Study and Log Export Ban Study, Forestry Commission, Accra, Ghana32 Richards, M., 1995. The role of demand side incentives in fine grained protection: a case study of Ghana’s tropical high forest. Forest Ecology and Management 78, 225–241.33 Analysis of export demand for Ghana’s timber products: A multivariate co-integration approach DavidM.Nanang, Journal of Forest Economics, accepted 2009, p 50. 34Amanor, K. S. (1999). Global Restructuring and Land Rights in Ghana. Nordiska Afrikainstitutet, Uppsala.

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In 1985 the Ghana Timber Marketing Board, as it was known then, went through changes

according to the government’s dedication to the ERP and its macro-economic policies. It was

divided into two separate parts, the Timber Export Development Board (TEDB) and the

Forest Products Inspection Bureau (FPIB). As the names would suggest, the TEDB focused

on the exporting sector of timber and export promotion, whereas the FPIB was responsible for

verifications, inspections, approvals of timber and wood, and furthermore responsible for the

issuance of export permits. This too encouraged the export of timber to expand, as well as to

be properly managed.

4.1.5 The ERP Years

In 1983 the first devaluation on the cedi occurred and the value of the cedi was at c8.83 to US

dollar 1.00, in contrast to c2.75 to US dollar 1.00 between 1980 and 1982. This made Ghana’s

wood exports volatile and cheaper for the competitive international market. This meant that

the capital received by timber firms was very small since it was in local currency. The firms

then had to return debt obligations to commercial banks meaning that the firms received little

real income and had to increase their output through export. The Forestry Commission

ordered the firms to repay their loans within 12 months, and only few could accomplish this.

Of the 59 borrowers, only 9 (15.3 per cent) had repaid on schedule.35 Although employment is

not included as a variable in this analysis, it is important to mention the change in staff

employed at timber firms. Following the ERP, the number of expatriate professionals had

doubled from 6% to 12% of total employed staff.36

5. Regulations and Policies on Timber Logging and its Import (EEC/EU)

5.1 Regulations and Policies

For a long time European markets have been the largest importers of African timber. Markets

in Germany, Great Britain, Spain, Italy, France – and to a lesser extent Portugal – have

dominated the trade.37 The direction of European import has been suggested to coincide with

the relationship of old colonies of Africa. The markets of the Southern EU appear to have

been depressed in 1993 - just prior to a 50% devaluation of the predominant local currency of

the region's producer countries - but otherwise their imports have been fairly stable.38

35 Forestry Commission 1988:636 Owusu 200137 Anonymous, GlobalTimber.org.uk38 Anonymous, GlobalTimber.org.uk

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The purpose of putting regulations and policies in relation to timber export from Ghana, as

well as from other African timber markets, is to show that the EEC/EU regulations were

affecting the price and in turn the quantity of timber being exported. Using economic theory I

can show that the price and value of timber products from Africa have increased, and

therefore the quantity of exports to Europe has decreased by exogenous factors like regulation

and policy. During the late 1990’s and 2000’s, when the effects of the EU regulations and

policies took place, the value of timber increased and in turn the quantity of timber imported

decreased. The price of timber is therefore an essential factor in this analysis and is shown

later in the results of timber price fluctuations preceding regulation and policy changes.

5.1.1 The International Tropical Timber Agreement 1983

This came into force in 1985. The Agreement aims to encourage increased and further

processing of tropical timber in producing member countries with a view to promoting theory

industrialization and thereby increasing their export earnings to encourage members to

support and develop industrial tropical timber reforestation and forest management activities

and to improve marketing and distribution of tropical timber exports of producing members.

In hindsight one can see that the income from the timber market was important for Ghana, as

well as it was as important to keep the export sector afloat. Following this is an interesting

point of how Ghana, as well as other African timber exporting countries, wanted to honestly

protect the logging of timber and ensure that the timber export would be sustainable as well as

keeping with European standards - which they would do by signing this Agreement – by

encouraging the development of national policies aimed at sustainable utilization and

conservation of tropical forests and their genetic resources, and at maintaining the ecological

balance in the regions concerned.39

5.1.2 The International Tropical Timber Council

It is defined within the Agreement that the council consists of all members of the Tropical

Timber Organization, members being the producing parties and the consuming parties. The

Intergovernmental Organizations are defined by the Agreement as including the European

Economic Community and any other intergovernmental organization having responsibilities

in respect if the negotiation, conclusion and application of international agreements, in

particular commodity agreements.40 Ghana is included as one of the producing members, and

39 http://sedac.ciesin.org/entri/texts/tropical.timber.1983.html40 http://sedac.ciesin.org/entri/texts/tropical.timber.1983.html

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Belgium, Denmark, France, Germany, Greece, Ireland, ITALY, Netherlands and the United

Kingdom (grouped as the EEC) are included as consuming countries. To show that the EU

was dominating role in the Agreement, the EEC had 27.7% of the votes, the second largest

number of votes allocated after Japan, which had 33%. The EEC was ranked a large

contributor to the decision which entails a sense of authority over the agreement.41

5.1.3 Eco-Labelling

In 1991, the European Union implemented a voluntary eco-labelling program in order to

ensure that products imported into the EU came from sustainable management certified firms.

This affected production in Ghana such as markets in cocoa, mango, tuna, as well as timber.

5.1.4 UK (United Kingdom) Timber Procurement Policy

In 1996 a voluntary guidance was issued in the UK to advise government departments to

purchase timber and timber products from sustainable and legal sources.42 However, the

guidance did not have a large impact on the timber market, but it is nevertheless an important

policy to mention since the majority of implementations from the EU came from the UK at

the start of the 1990’s. This was the first of several policies, with others to follow thereafter;

most of the policies implemented during the 1990’s were introduced by single member states,

not by the EU or European Commission. The responsibility of this task lies with the supplier

of timber, implying that, in this case, the Ghanaian timber firms would be responsible for

selling sustainable wood products.

5.15 FSC (Forest Stewardship Council)

The FSC is a global forestry certification system which was set up in 1992 with a purpose to

promote environmentally appropriate, socially beneficial and economically viable

management of the world’s forests.43 However, it makes note that the main purpose of this

system is to promote legally harvested timber and sustainability, leaving the responsibility of

economically viable management to the timber exporting governments, tied to this system.

5.1.6 ERP Revisited

41 Statistical Data and Specific Indicators (for the monitoring of the International Tropical Timber Trade)42 National policy documents, taken from Public Procurement Policies for Forest Products and Their Impacts, FAO, 2006.43 FSC Forest Stewardship Council-vision and mission. Fsc.org – obtained 2013-01-15

17

The importance of the ERP did not only have a positive effect on the Ghanaian economy, but

also effected how the timber firms functioned. In 1983 the Government of Ghana held a

conference with donors from Ghana’s largest timber importing countries, the majority of

which were European member states. There they decided to encourage the use of timber for

infrastructure in Ghana.44

According to MLF (1996), efforts to improve the industry through the World Bank sponsored

Economic Recovery Program may have enhanced the gross production of timber, but these

efforts strengthened an already high demand on the forest resource. 45 In another opinion, ‘The

recovery program did not cater for developing and expanding the forest resource base’.46

5.1.7 FLEGT and VAP’s

The Forest Law Enforcement, Government and Trade (FLEGT) was the first EU action plan

to exclude illegal timber on the market. As previously mentioned illegal timber was a

significant problem for the importing markets. It was introduced in 2005, and Ghana signed

the Agreement in 2009. The Agreement refers to the 1992 Non-legally Binding Authoritative

Statement of Principles for a Global Consensus on the management, conservation and

sustainable development of all types of forests, as well as the 1994 Forest and Wildlife Policy

of Ghana which aims at conservation and sustainable development of the nation’s forest and

wildlife resources.47 It establishes a set of procedures and requirements aiming at verifying

and attesting, by means of FLEGT licenses, that timber products shipped to the Community

were legally produced.48 The Agreement puts pressure on the Ghanaian government through

the designation of certifications and licensing of timber. Furthermore the responsibility of

verifying legally produced timber is designated to Ghana to implement a system for

verification.

5.1.8 Other Restraints on the timber market in Ghana

The European market was generally depressed by the end of the 1980’s as a result of

recession, and buyers continued to hold large quantities of tropical wood without being able to

44 Owusu J.H.  Journal of Modern African Studies. (Journal of Modern African Studies, 2001, 39(1):72)

45 http://etd.lsu.edu/docs/available/etd-11072009-093300/unrestricted/Baffoe_thesis.pdf46 Interview, General Manager Samartex Timber Company Ltd. See Bibliography.47 European Community, Ghana, 2009, Voluntary Partnership Agreement between the European Community and the Republic of Ghana on forest law enforcement, governance and trade in timber products into the Community48 European Community, Ghana, 2009, Voluntary Partnership Agreement between the European Community and the Republic of Ghana on forest law enforcement, governance and trade in timber products into the Community

18

sell, which resulted in a slow movement of trade.49 Even the rise of western and international

anti-deforestation groups, such as Greenpeace, began to have an effect on the timber market,

decreasing the demand for timber. Furthermore, an increasing use for materials other than

wood decreased the timber market. Substitutes from plastics and aluminum, alongside a high

cost of production of timber, meant that Ghana experienced a decline of exports to the EC.50

6. Empirical Findings

6.1 African timber production and export

6.1.1 Export and Value

Between 1961 and 1970, Africa remained the second largest exporter of industrial roundwood

as 10.53% of export in the world came from Africa.51 By analyzing the graph below (FAOstat

2013), one can see the export quantity (m3) of roundwood from three African countries,

chosen to show the differences between the African countries and in comparison to Ghana,

Guinea, Ghana and Central African Republic. There has been a dramatic decline in export of

roundwood since 1961, with a short period of increase between 1985 and 1995 in Ghana.

Diagram 1: A Graph to Show the Amount of Roundwood (m3) Exported from Guinea, Ghana

and Central African Republic Between 1961 and 2012

The Export Value (1000 $US) of roundwood from the same countries shows a constant low

value since 1961 to a slow rise in the 2000’s, with only an exception of a short period of

increase in 1994 in Ghana. (FAOstat 2013)

49 Owusu J.H.  Journal of Modern African Studies. (Journal of Modern African Studies, 2001, 39(1):76)

50 Interview with the General Manager of Samartex Timber, Ghana. (August 2013)51 FAOstat 2013

19

Diagram 2: A Graph to Show the Export Value (1000 $US) of Roundwood from Guinea

Ghana and Central African Republic Between 1961 and 2012

The value of timber has increased in recent years, which in turn implies that the export

quantity decreases, all according to economic theory which suggests a negative correlation

between the demand for a good and its price. High timber prices would reduce the quantities

that would be exported from Ghana and may encourage processing in importing countries.52

The next graph shows a large group of African countries and their export quantity (m3) of

roundwood between 1961 and 2012. (FAOstat 2013)

Diagram 3: A Graph to Show Export Quantity (m3) of Roundwood from Several African

Countries Between 1961 and 2012

Diagram 4: A Graph to Show the Export Value (1000 US dollars) of Roundwood from

Several African Countries Between 1961 to 2012 (FAOstat 2013)

52 Analysis of export demand for Ghana’s timber products: A multivariate co-integration approach DavidM.Nanang, Journal of Forest Economics, accepted 2009.

20

6.1.2 Exports of Timber from Africa to Europe

The volume of logs and plywood consumed by Europe has been decreasing since 1998.

Meanwhile, the European consumption of sawn timber is fluctuant but not declining, because

it is mainly based on some specific technical requirements which only some tropical species

can fulfill.53 But for the last decade the volume and the share of African exports to Europe is

progressively decreasing, while they have diverted their sales towards Asia. Tropical logs as a

percentage of total non-coniferous log imports into Europe declined about 50% from 1970 to

1990, indicating possible substitution opportunities for non-tropical hardwoods from other

suppliers.54 The most striking examples are the Republic of Congo, where exports of logs,

sawn timber, plywood, in roundwood equivalent to Europe have fallen from more than 80%

to less than a surprising 15% in recent years.55 From 1970 to 1990, Europe’s overall increase

in real prices for tropical log imports (22 percent) was accompanied by a substantial decrease

(56 percent) in quantity of imports.56

In recent years, between 1990 and 2009, there has been a general decline in logs export to the

European Union (diagram 5). Between 2005 and 2009, there is a sharp reduction in the

quantity of logs export to the EU from Africa. China has grown dramatically an importer of

logs. African countries have exported primarily to Europe and it is suggested that this is

because of the relationship with Europe (old colonies of Great Britain) and comparatively low

transportation costs. The fact was that the expatriate firms had more capital at their disposal

for land purchases than local investors. This opened the way for the intrusion of large-scale

53 In 1A short analysis on the stricter European regulations on tropical hardwood imports and their side effects First version : March 2007 By Roda, Jean-Marc1, Arets, Eric J.M.M2; Lim, Hin Fui3990,

54 Historical Price Trends of Nonconiferous Tropical Logs and Sawnwood Imported to the United States, Europe, and Japan - C. Denise Ingram.55 In 1A short analysis on the stricter European regulations on tropical hardwood imports and their side effects First version : March 2007 By Roda, Jean-Marc1, Arets, Eric J.M.M2; Lim, Hin Fui3990,56 Historical Price Trends of Nonconiferous Tropical Logs and Sawnwood Imported to the United States, Europe, and Japan - C. Denise Ingram

21

expatriate concessionaire companies into for example southwestern Ghana.57 Ghana is

recognized as part of West Africa in this diagram since they joined the Economic Community

of Western African States (ECOWAS) in 1975, whereas the others in the diagram are separate

from this.

Diagram 5 - West Africa and the Congo Basin - exports of logs*   to China, the EU and

elsewhere   between 1990 and 2009 (excluding plantation logs)

* excludes timber (including teak) which derived from plantations.

In diagram 6, one can see an upward trend since 1990; however by looking at Ghana more

specifically, there is a downward trend since 2005. Despite Ghana being the third largest

exporter of quantity of timber in Africa, there is a slight reduction in later years. On the other

hand, Ghana is the largest exporter of quantity of timber to the rest of the world, with a vast

increase since 1992.

57 SystemTropical Forests and West African Enterprise: The Early History of the Ghana Timber TradeAuthor(s): Raymond E. DumettSource: African Economic History, No. 29 (2001), pp. 79-116( P.114)

22

Diagram 6 - West Africa and the Congo Basin - exports of timber*   other than logs to China,

the EU and elsewhere between 1990 and 2009.

* excludes timber (including teak) which derived from plantations.

This shows where regulations have taken an effect on timber export in recent years. The

global market for timber import has become more competitive which can be seen by big

markets such as China. In 2005 the EU adopted a regulation scheme that allowed timber to be

imported to EU only from countries that had signed FLEGT (Forest Law Enforcement,

Governance and Trade) Voluntary Partnership Agreements (VPA’s). The agreement states

that bodies or persons designated by the exporting country are to monitor the legality of

timber exported. In the case of Ghana, which signed agreements in 2006, this automatically

put pressure on the government to ensure that the monitoring is carried out and meets the

requirements of the Agreement. Cameroon and Republic of Congo both signed in 2010

respectively, Liberia and Central African Republic in 2011.

6.2 The Impact and Effects of Regulation and Policy by the EU on the Production and

Export of Timber

The International Tropical Timber Agreement of 1983 most certainly encouraged further

processing of timber as seen in the diagram below, where production of roundwood between

1980 and 1983 increased, and after 1983 production remained high and steady.

23

Diagram 7: A Graph to Show the Production of Roundwood (m3) in Ghana Between 1980

and 1988

Prior to 1980, the amount of roundwood produced had remained at approximately 10 million

m3 each year since 1970. By 1983 the amount produced reached 13,262,000 m3, and

remained by that amount until 1989.58 Of roundwood produced, only 7000m3 were exported

in 1984 compared to 318600m3 in 1987. Export value remained low at approximately 5,000

US dollars between 1980 and 1986. In 1987 value increased to 39,505 US dollars (FAOstat).

In 1990, the export quantity of roundwood had decreased again to a low amount of 141285

(m3) in comparison to its peak of 1987.59 Although the quantity of tropical sawnwood imports

to Europe increased, tropical lumber as a percentage of total imports of timber decreased from

44 percent in 1970 to 33 percent in 1990. In other words, while Europe’s import market for

non-coniferous sawnwood expanded, the role of tropical sawnwood declined as real prices

increased by 47 percent.60

The implementation of the EU eco-labelling program showed vast declines in imports, since

the consumer considered the cost of timber from certified firms as too expensive. However, it

is argued by the developing countries that this cost was placed by the importing firms and not

the exporting firms.

In line with the UK Timber Procurement Policy, the UK had a low and steady quantity of

import of roundwood since 1991 and in 1993, at 25,000 m3 and in 1994, a large increase

occurred reaching 848,000 m3 by the end of 1996.61 Despite this increase in imports, all

58 FAO stat – forestry database, 2013.59 FAOstat – forestry. 201360 Historical Price Trends of Nonconiferous Tropical Logs and Sawnwood Imported to the United States, Europe, and Japan - C. Denise Ingram.61 FAOstat – forestry. 2013

24

imports from developing countries declined to US dollars 96.3 billion in 1991 and even more

so to US dollars 91.8 billion in 1993.62

The effect of the ERP boosting infrastructure, the majority of members being from the EEC,

ensured that timber would be easier to export especially with two new built ports. This in turn

affected the return of investments. The firms and owners of firms would prefer to have tax

returns and foreign exchange retention quotas, based on the volume of export, under the

investment code.63

The FLEGT VAP with Ghana heavily affected the timber sector and its exports with Europe.

Table 1 shows the export quantity of veneer sheets (m3) from Ghana to the United Kingdom

between 2000 and 2010.

Diagram 8:

20002001

20022003

20042005

20062007

20082009

20100

50010001500200025003000

A Graph to Show Export Quantity (m3) of Veneer Sheets from Ghana to the United Kingdom be-

tween 2000 and 2010

Export Quantity (m3)

Source: FAOstat- forestry 2013.

Another example to show the effect of the FLEGT VAP is the decline of exports of

sawnwood to the UK between 2000 and 2010.

Diagram 9:62 FAOstat – forestry. 201363 Owusu J.H. 2001, Determinants of export-oriented industrial output in Ghana:the case of formal wood processing in the era of economic recovery. The Journal of Modern African Studies 39(1),51–80.

25

20002001

20022003

20042005

20062007

20082009

20100

2000400060008000

10000120001400016000

A Graph to Show the Export Quantity of Sawnwood (m3) from Ghana to the United

Kingdom between 2000 and 2010

Export Quantity (m3)

Source: FAOstat- forestry 2013.

Furthermore, findings show that a shift in trade direction was occurring, in that the decreasing

amount of timber exported to Europe was rather being exported to China. 2010 shows a vast

increase in export to China for Tropical Industrial Hardwood.

Diagram 10:

20002001

20022003

20042005

20062007

20082009

20100

4000

8000

12000

16000

20000

A Graph to Show the Export Quantity of Industrial Tropical Roundwood (m3) from Ghana to China

between 2000 and 2010

Export Quantity (m3)

Source: FAOstat – forestry 2013.

In 2005, a rise in exports of veneer sheets to China occurred; indicating the effects of FLEGT

VAP’s introduced in the same year.

Diagram 11:

26

20002002

20042006

20082010

0

2000

4000

6000

8000

10000

12000

A Graph to Show the Export Quantity of Veneer Sheets (m3) from Ghana to China between 2000

and 2010

Export Quantity (m3)

Source: FAOstat – forestry 2013.

Even sawnwood was being preferred to China, with a steady increase between 2003 and 2008,

and again from 2009 to 2010.

Diagram 12:

20002001

20022003

20042005

20062007

20082009

20100

100020003000400050006000700080009000

10000

A Graph to Show the Export Quantity (m3) of Sawnwood from Ghana to China between 2000

and 2010

Export Quantity (m3)

Source: FAOstat – forestry 2013.

This seems to show that the Ghanaian government was trying to keep exports at constant

levels with the EU, but that the price of timber increased too much after the implementation of

FLEGT, leading the consumers of timber in Europe to decrease their demand. This also

proves that Ghana cannot control their chain of supply. The demand for timber, as economic

27

theory suggests, is negatively correlated with the price of timber. Exports of timber increased

their market with China as the diagrams suggest.

6.3 The Increase of Exports after Ghanaian Regulation and Policy Changes

Diagram 13: A Graph to Show Export Quantity of Roundwood (m3) of Ghana between 1970

and 2000

Source: FAOstat - forestry 2013

There have been consequences of all these changes on the export value and export quantity of

timber from Ghana, the latter being shown in the above diagram. Firstly one can compare

export value pre-1994 Forest Policy approval with a decreasing or stagnant quantity up until

1993 when a dramatic increase, probably due to EEC countries exploiting the low value and

low cedi, and thereafter a sharp fall in exports. The ban on 18 species of wood products in

1989, as well as the difficulty of the Ghanaian economy shows an average export quantity

increase of roundwood of 90,000 m3 each year between 1989 and 1994.

Ultimately, Ghana had taken advantage of its forest land area, exploited it to ensure stable

revenues from the timber sector, which can be seen from statistics of timber value showing

little change up until the 1980’s. The consequence of the second Forest Policy 1994 and

Ghana’s expansion of forest reserves show a great decline in the export sales of logs and

timber, as well as increase in the value and price of timber.

The log export ban created inefficiency in the wood processing industry and led to low

domestic price of logs which is an indicator of the increasing protection for domestic

processors.64

64 http://etd.lsu.edu/docs/available/etd-11072009-093300/unrestricted/Baffoe_thesis.pdf

28

As mentioned, Ghana sought to acquire large investments from foreign countries, often those

who imported Ghana’s wood products. The majority of these were members of the EEC. The

weakening Ghanaian cedi, as well as the decreased value of timber, meant that investors were

happy to put capital into timber firms. For example, from 1983 through 1991, a minimum of

81% of the volume of processed wood exported was sent to EEC countries annually.65

The benefit of having an increase in expatriate staff is a small but interesting point on how

firms kept a good business relationship with European buyers. The use of foreign experts also

helped to establish good reputations for companies internationally.66 Even more so, business

connections could be made and benefit both the Ghanaian timber firms as well as the

importing firms. The importing countries and more specifically firms were more likely to

make business with same-nationality staff in the timber firms to approve of the trade and

export.

Although the Ghanaian government made every effort to encourage their timber export, as

well as regulating the types of timber, the incentives have not been outlined. The decrease in

log sales during the 1970’s was due to the economic instability of the country, which

importing countries were most likely experiencing too, knowing that the developing countries

were at unease and not of credibility. On the other hand, the process of the ERP put Ghana on

track to ensure economic growth once again. It is assumed by historians and economists alike

that after this rehabilitation the timber export sector would return again to its rate of the

1970’s. This lasted until the beginning of the 1990’s. The sector was shifting. The demand for

timber had increased with the majority exported to Europe; however the prices for timber

increased dramatically at the same time as the global demands for timber began to shift. The

once expatriate firms and good links with Africa were beginning to dissolve. The effect of

global hot-topics, such as environmental sustainability, impacted Ghanaian timber production.

The Ghanaian government contributed to the sector in several positive ways and hoped the

export would rebound.

7. Analytical Discussion

Ghana has experienced a timber export sector decline.

65 Owusu J.H.  Journal of Modern African Studies. (Journal of Modern African Studies, 2001, 39(1):65)66 Owusu J.H.  Journal of Modern African Studies. (Journal of Modern African Studies, 2001, 39(1):69)

29

“The cost of production as well as the effects of over-regulation and bureaucracy by the EU

has placed pressure on countries such as Ghana,67 heavily reliable on timber export income,

and these are two of the main reasons for the decline of timber exports. The Forestry

Commission of Ghana also agrees that the EU had placed pressure of Ghana – “The main

reason for Ghana to join the EU FLEGT was the need for Ghana to maintain its share in the

EU timber market.”68 However, “the high cost and hence uncompetitive pricing” have

contributed to this decline,69 as outside determining factors. According to the Austrian School

regulation or policy changes will always have negative effects on either the producer or

consumer, and therefore one must question the necessity of its implement. In some cases

regulations can have counter-effects, and new regulations must replace the old.

“Ghana’s trade regulations have not had negative effects on the timber export.”70 This

supports my data showing Ghanaian regulation and policy changes on the timber market. The

attempts to introduce regulation through species-bans, forest policy and the formation of

TIDD, have only encouraged Ghanaian timber industries to manage production and

businesses correctly and to consider production in sustainable amounts.

It is also clear from this thesis that there is a scarcity of data and research into the demand of

timber or wood products. Without this, it is difficult to judge whether a regulation can benefit

trade and what its long-term effects may be. Economic theory in this thesis reflects the

patterns of price and export. When theory implies that economic regulation benefits trade,

examples I have taken up argue these theories, such as FLEGT VAP’s, the UK Timber

Procurement Policy and the FSC, which show that after their enforcement, Ghana’s export to

Europe has decreased. Examples to show that Ghana has increased its timber export from the

introduction of regulations and policy changes are the Forest Policy of 1994, timber species

bans and the Ghana Investment Code of 1985.

My empirical findings have shown that a decrease in timber export occurred, and is related to

the intrusion of European regulations and policies. I used the Ghanaian government

regulations to show a comparison that European regulations have had a negative effect on

timber export, rather that positive. The main difference between these regulations and their

effect is that regulations with the objective to provide environmental sustainability and

common interest in protecting the nature of the forests (EU regulations) cannot provide 67 Interview, General Manager of Smarartex timber & Plywood Ltd. August 2013.68 Fcghana.org – EU FLEGT initiative69 Interview, General Manager of Smarartex timber & Plywood Ltd. August 2013.70 Interview, General Manager of Smarartex timber & Plywood Ltd. August 2013.

30

encouragement for timber export. Those with an objective to maintaining timber export

growth as well as effective management have encouraged timber export growth but have not

maintained sustainability (Ghanaian regulations). This implies that regulations can benefit the

environment at a price (reduced export), or harm the environment (increased export).

“Over-regulation and bureaucracy are problems which face the timber industries today in

LED-countries”.71 Environmental policies, such as FLEGT, have at least filled their purpose,

to ensure sustainable deforestation, as well as reducing illegal logging. The negative effects

are shown in my empirical findings, they have increased the value of timber and thereby

reduced exports, meaning that Ghana will have to look elsewhere in order to maintain

economic growth from the timber market. Furthermore, they have pushed their exports

elsewhere. This may also have a contradictory effect, in that illegal logging will continue to

other markets. Other regulations, such as the 1983 International Tropical Timber Agreement,

did not have environmental sustainability as their interest. It was more an approach of how to

increase production and export.

This thesis is partly limited by the lack of research in the negative economic effects of

environmental regulation since the long-term effects are yet to be seen. Looking into the

future, this topic of environmental economics will become increasingly important and

questions like ‘How will developing countries shift their markets?’ and ‘How can we maintain

economic growth as well as environmental sustainability?’ will dominate the research.

8 Bibliography8.1 Literature and Articles

Amanor, K. S. (1999). “Global Restructuring and Land Rights in Ghana.” Nordiska

Afrikainstitutet, Uppsala. Research Report no. 108, pp. 1-161.

71 Interview, General Manager of Smarartex timber & Plywood Ltd. August 2013.

31

Baumol and Oates. (1988) The Theory of Environmental Policy. Cambridge, UK. Cambridge

University Press.

Birikorang , G., R. Okai, K. Asenso-Okyere, S. Afrane, and G. Robinson (2001) Ghana Wood industry Study and Log Export Ban Study. Forestry Commission report

to the Ministry of Lands and Forestry. Forestry Comission, Accra Ghana

Cordato R., (2004) “Toward an Austrian theory of environmental economics”. The Quarterly

Journal of Austrian Economics Volume 7, No. 1, pp. 3-16.

Dumett Raymond E. (2001) “System Tropical Forests and West African Enterprise: The Early

History of the Ghana Timber Trade.” African Economic History, No. 29, pp. 79-116.

Ingram C. Denis. (1993) Historical Price Trends of Non-coniferous Tropical Logs and

Sawnwood Imported to the United States, Europe and Japan. U.S. Dept. of Agriculture,

Forest Service, Forest Products Laboratory.

Magee, Stephen P, William A. Brock, and Leslie Young. (1989) Black Hole Tariffs and

Endogenous Policy Theory. Cambridge, UK. Cambridge University Press.

Nanang David M. (2010) “Analysis of export demand for Ghana’s timber products: A

multivariate co-integration approach.” Journal of Forest Economics. vol. 16, issue 1, pp. 47-

61.

Owusu J.H. (2001) “Determinants of export-oriented industrial output in Ghana: the case of

formal wood processing in the era of economic recovery.” Journal of Modern African Studies.

Volume 39, issue 1, pp. 51-80.

Richards, M. (1995) “The role of demand side incentives in fine grained protection: a case

study of Ghana’s tropical high forest.” Forest Ecology and Management 78, pp. 225–241.

Roda, Jean-Marc1, Arets, Eric J.M.M2; Lim, Hin Fui. (March 2007) “A short analysis on the

stricter European regulations on tropical hardwood imports and their side effects.” Working

Paper, 1st version, pp. 1-11.

Stigler, George J. (1971) “The theory of economic regulation.” Bell Journal of Economics

and Management Science 2, volume 2, no. 1, pp. 3-21.

8.2 Other Literature

32

The European Commission homepage - Ec.europa.eu

FAOstat-Forestry, homepage – www.faostat3.fao.org

World Bank homepage – www.worldbank.org

The Forestry Commission of Ghana, homepage – www.ghanatimber.org

GlobalTimber.org.uk

National policy documents, taken from Public Procurement Policies for Forest Products and

Their Impacts, FAO, 2006.

Federal Research Division of the Library of Congress. The Country Studies Series Published

1988-1999.

Interview: General Manager at Samartex Timber & Plywood Company Limited, established

in 1995. Hitherto, the company was known as African Timber & Plywood Company (AT&P)

which had been in existence since 1947 under the UAC group of companies. Samartex

Timber & Plywood Company Limited took over AT&P at a time when it was saddled with a

myriad of problems including mismanagement and a disastrous fire outbreak, which had left

the company’s facilities in chaos. Today, Samartex is one of the largest private sawnmills in

Ghana and exports are regulated through FLEGT. (samartex.com.gh)

33