Government of Malawi is loosing about MK1 billion every year due to lack of regulating and taxation on charcoal burning says a report financed by the Malawi Forest Governance Learning Group (FGLG), the community Partnerships for Sustainable Resource Management in Malawi (COMPASS 2) and the Improved forest Management for Sustainable Livelihoods Programme (IFMSLP).
“All charcoal production in the country is currently illegal according to existing legislation but if charcoal was regulated and taxed, Government could raise substantial revenues,” says the report.
It says the four largest urban cities, Blantyre, Lilongwe, Zomba and Mzuzu has an estimated value of MK5.78 billion, roughly US$41.3 million or 30.4 million Euros. This makes it the third largest industry in Malawi after tobacco and tea.
“The four largest urban areas of Malawi consume 6.08 million standard bags per year or 231, 177 metric tones of charcoal. Using the estimated industry worthy of MK5.78 billion per year, the government of Malawi is loosing MK1 billion per year in VAT alone,” said Dr. Patrick Kambewa who was leading the research.
This level of charcoal production requires 1.4 million cubic metres of wood per year equivalent to about 15, 000 hectares of forestland cut per year. Nearly 60 percent is produced in Forest Reserve and National Parks and that almost 40 percent come from customary land while only 2 percent of charcoal enters Malawi from Mozambique.
The charcoal industry in Malawi provides 92, 800 jobs, many of which are vital for poor people. This figure includes 46, 500 producers, 12, 500 bicycle transporters, 300 other transporters and 33, 500 traders.
Unexpectedly, the highest percentage of Malawi’s charcoal production about 38 percent comes from 388 well-established large-scale producers, (up to 500 bags per month), small-scale charcoal producers, (less than 30 bags per month) produce 35 percent and those medium-scale burners, (30-100 bags per month) produce 27 percent of the total charcoal.
Bright Sibale, Director of Centre for Development Management told journalists in Lilongwe that “Although, charcoal making is both reducing the forest area and altering the species composition of forest, all what we are saying is that government should legalize charcoal production. After all, city assemblies under the Ministry of Local Government are already correcting market fees, despite charcoal being an unlicensed product.”
He concurred with the report that current effort to discourage charcoal making are expensive and ineffective, so charcoal making is likely to continue. He, however, say incentives could be arranged to encourage co-management of areas of indigenous woodland through copping and natural regeneration, in order to ensure sustainability for the charcoal industry.
The 1997 forest Act under section 81 says ‘No person shall make or sell charcoal from indigenous timber or tree expect pursuant to licence issued under this section’, but surprisingly no person has been issued a licence despite of applying to relevant authorities.