AFDB1JP00001124

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The African Development Bank Group (AfDB) places renewed emphasis on Natural Resources Management as a transformational platform, emphasizing the role of natural resources in the diversification of country and regional economies in the process of promoting inclusive growth and transitioning to green growth. To respond to the challenges facing sustainable management and use of Africa’s natural resources, the AfDB created the African Natural Resources Management and Investment Centre (ECNR). The ECNR’s mandate is to assist African governments to maximize development outcomes derived from natural resources in Africa by boosting the capacity of the governments to achieve inclusive and sustainable growth.

The total ban on the export of round timber in Central Africa (CEMAC and the DRC) was officially set for 1 January 2028, following the decision of the Council of Ministers of the Economic Union for Central Africa held in Bangui on 23 February 2024. The roughly 3.56 million km2 of the Congo Basin is home for 130 million people, the habitat for tens of thousands of species, and a vital regulator of the Earth’s climate and biophysical systems at continental and planetary scale. Within the Congo Basin, the Central African Republic is classified as a high forest cover country (with forest cover estimated at 31-50%) while Cameroon, the Republic of Congo, DRC, Equatorial Guinea and Gabon are very high forest cover countries (with over 50% of total land area under various forest formations). Despite this potential, the wood sector remains inadequately industrialised, generating limited employment opportunities. The forestry sector in the Congo Basin countries contributes far less than its potential would suggest to their GDPs due to the low level of processing primary wood products into consumable goods. For instance, from 2010 to 2019, countries in the Congo Basin were net exporters of primary wood products worth about $21.54 billion but were also net importers of secondary and tertiary wood products worth $1.15 billion and $797.68 million respectively. The figures suggest poor industrial performance in the secondary and tertiary wood processing sectors and that economic gains from the export of primary wood products are diminished by importing finished products. This absence of local added value has major economic consequences for the region in terms of the loss of jobs and wealth creation opportunities that are currently displaced beyond the continent. For instance, the import of wooden furniture constitutes over 80% of the trade deficit associated with secondary wood products trade in the Congo Basin, when there are huge opportunities for promoting small-scale furniture production and carpentry hubs to create several thousand jobs in the region. Moreover, about 50% of the trade deficit in tertiary products is from printing and writing papers for which demand will continue to grow in coming years as the regional population increases, representing a good investment opportunity. Industrialization should reduce the export of primary wood products to the export of secondary and tertiary processed products which will result in significant positive impacts on trade balances.

This study is especially important because most wood products from Africa are still exported in the raw form to Asia, Europe and America with little value addition, which if done, could significantly benefit national economies. It is proposed as a strategic and practical initiative to harness the Congo Basin`s forest resource wealth while addressing key development challenges, including inclusivity, governance, processing zones and sustainable growth.

Study Goal and Objectives

Project Goal: The study seeks to unlock the development potential of the wood sector in fostering diversification, strengthening its functionality, and promoting accountable and equitable private sector participation to accelerate economic growth. It aims to create pathways for integrating local and international private sector actors into wood value chains, while addressing critical barriers such as governance weaknesses, regulatory inefficiencies, infrastructural gaps, and the need for sustainable and inclusive practices.

Study Objectives: The study will analyse wood value chains, identify constraints and opportunities for investments that could generate added value and formal employment in the Congo Basin, with focus on cross-border processing zones. Based on existing roadmaps or plans developed at national level, it will propose a roadmap setting out the necessary policy and regulatory reforms, structural investments and financing mechanisms to revitalise regional wood value chains, with a view to strengthening intra-regional trade based on economic corridors and reducing dependence on finished wood products imports. Finally, the study will propose a portfolio of priority forestry projects that could be supported by the Bank to ensure the development of secondary and tertiary wood products industries at national and regional levels, highlighting those that can constitute cross-border processing zones.