Existing and Potential Forest Financing Mechanisms for Smallholders and Community Forestry in West Africa

Forests form a vital component of the environment and national economies in West Africa. In recent years, there has been considerable reduction in the forest area in the region which will have significant social, environmental and economical implications. One of the factors contributing to this decline is the absence of adequate and readily accessible finance to support sustainable forest management. This inadequacy is particularly evident for smallholders and forest communities who undertake the bulk of forestry activities and play an important role in rural development and poverty alleviation. Devising forest financing mechanisms that can benefit smallholder and community forestry is a key challenge for the environmental and economic security of the region.

This study reviews some existing and potential financing mechanisms that can benefit smallholder and community forestry in the region, with a particular focus on private
financing mechanism and payment for environmental services schemes. On a global level, the level of private financing in the forest sector far exceeds domestic or foreign public funding (Savenije and van Dijk, 2008). This observation however does not apply to several
African countries, where the forest sector has not been able to mobilize significant funding from the private sector, and public funding, in particular from foreign sources, remains a major source of forest sector funding. Public funding of the forest sector has however consistently been at insufficient levels for most African countries.