Mozambique Country Forest Note October 2018 This Mozambique Country Forest Note articulates the status, vision and relevant investment and policies of the forest sector in Mozambique and presents the forest-smart approach adopted by the country of integrated landscape management. It makes the case that strategic investments in the forest and land use sectors are needed to reduce rural poverty and ensure the sustainable management of natural resources, particularly forests. This Note is intended to serve as the basis for dialogue within the government and with development partners and other stakeholders on the sector’s policy priorities and future investments—including for securing additional financing for advancing integrated landscape management. André Aquino, Celine Lim, Karin Kaechele, and Muino Taquidir The World Bank 1 Summary Mozambique has 34 million hectares (ha) of natural forests, covering 43% of its area.1 The predominant forest ecosystem is the miombo, covering about two thirds of the total forest area. Other forest ecosystems include internationally recognized biodiversity hotspots, such as the coastal forests in the south, afro-montane forests in central Mozambique, and coastal dry forests in the north; and the second-largest area of mangroves in Africa. Forests are an important contributor to the country’s economy and a source of employment, income, and livelihoods in Mozambique’s rural areas. The sector contributed about US$330 million to GDP in 2011 and directly employed 22,000 people (FAOSTAT, 2011). Forests provide goods and services to local communities, including food, energy, medicine, construction materials and furniture. In some rural communities, miombo woodlands contribute almost 20% of household cash income and 40% of subsistence (non-cash) income.2 Forests provide ecosystem services of both local and global value. These include climate regulation through carbon sequestration and storage, watershed protection through soil erosion control, water quality and quantity provision, as well as habitat for globally important species, such as Africa’s iconic large mammals and unique endemic species, such as the Gorongosa Pygmy Chameleon and Vincent’s Bush Squirrel. Based on the recent National Forest Inventory (NFI, 2018), the country’s above- and below-ground carbon stock totals more than 5.2 billion tCO2. This carbon store is central to the country’s climate change mitigation commitments. Although Mozambique’s forests have tremendous value and unrealized potential, they are being rapidly depleted. The NFI 2018 indicates that 267,000 ha of forests were lost each year from 2003 to 2013, a historical deforestation rate of 0.79%. This led to almost 40 million tCO2 being emitted each year, 57% of the country’s total greenhouse gas emissions of 67 million tCO2. From 2014 to 2016, around 86,000 hectares of forests were lost each year, half the rate of the previous period. The underlying causes of deforestation and forest degradation are poverty, high population growth, and international demand for valuable timber. Rural poverty and population pressure mean alternative sources of income are limited, leading to unsustainable forest use. Conversion to small-scale agriculture is the main direct driver of deforestation, accounting for 65% of forest loss. The main drivers of degradation are extraction for biomass and the unsustainable, sometimes illegal, harvesting of timber. Deforestation and forest degradation levy high costs on local communities, the national economy, and global community. With forest loss, local communities lose access to forest products they depend on, reducing their resilience to the impact of the climate and the water flows that forests regulate so well. National revenue is lost because of the suboptimal use of forest resources: opportunities for sustainable use (such as nature-based tourism or sustainable forest management) are reduced, while illegal activities lead to much- needed state revenue being siphoned-off. The global community faces biodiversity loss and the impact of increased GHG emissions. The Government of Mozambique is showing an unprecedented level of commitment to reducing deforestation and forest degradation, and to improving forest governance. Mozambique’s National Reducing Emissions from Deforestation and Forest Degradation + (REDD+) Strategy aims to reduce deforestation by 40% and restore 1 million ha of forests by 2030. 1  Based on the definition of forests of 30% canopy cover and a minimum 3-meter in height in an area of over 1 hectare. 2  Hedge and Bull. Socio-economics of miombo woodland resource use: a household level study in Mozambique. In: Managing the Miombo Woodlands of Southern Africa Policies, incentives and options for the rural poor (2011) 2 An average of 267,000 ha of forest were lost Mozambique’s Nationally Determined Contribution annually between 2003–2013 due to: (NDC), submitted to the United Nations Framework Convention on Climate Change (UNFCCC) in 2016, 4% Other sets targets for greenhouse gas emission reductions 65% 4% Commercial of 23 MtCO2 from 2020 to 2024, and 53 MtCO2 from Slash and burn agriculture 2025 to 2030. agriculture 7% Fuelwood A series of reforms are being undertaken by Mozambique in the sector, including the revision 8% Wood of its policy and legal frameworks, the creation products of a new institution for forest law enforcement, 12% Urban expansion a moratorium on new forest concessions, and a Figure 1: Deforestation drivers. Source: Winrock and Ceagre (2016). ban on log exports. These reforms aim to confront challenges faced in sector and move it towards greater sustainability. The World Bank has given these reforms a total of over US$300 million in support since 2013 through investments, technical assistance, analytical work, and results-based payments. The Bank seeks to provide opportunities for the country’s poorest citizens (the “bottom forty”) through the sustainable use of forest resources, including forest and wildlife management, conservation agriculture, and nature-based tourism. The Bank has supported the government to help it gain access to multiple sources of financing, including climate finance from the Climate Investment Funds, Global Environmental Facility, and Forest Carbon Partnership Facility (FCPF) Carbon Fund for performance-based payments. It has also found other development partners through the establishment of a Multi-Donor Trust Fund for Landscapes and Forests management. The Government of Mozambique is using World Bank investments to support the adoption of integrated landscape management, while generating benefits for local communities. The integrated landscape approach entails working on larger geographic areas, made up of multiple land uses, and involving several stakeholders. It calls for investments and enabling policies within and beyond the forest sector. It aims to achieve livelihood diversification, sustainable forest management, and climate change mitigation. The Bank’s investments include the promotion of sustainable forest and agriculture value chains, agroforestry, sustainable charcoal production, community forest concessions, community-based tourism, and commercial forest plantations. In terms of strengthening the enabling environment, the Bank supports the securing of community rights to land, reforming forest concessions, and strengthening forest governance and land use planning. Promoting sustainable forest management in Mozambique requires significant financing, as it entails changing the land use behavior of millions of smallholders and creating incentives among national stakeholders to manage forests sustainably, as opposed to extracting the most from them in the short- term. Mozambique has developed a Forest Investment Plan that identifies how resources would be used. Further resource mobilization is needed to scale it up and replicate it in other landscapes. 3 This report was made possible by the contributions of many. We would like to thank colleagues from the World Bank’s Mozambique Environment and Natural Resources team, the National Forest Directorate (DINAF), the National Sustainable Development Fund (FNDS) of the Ministry of Land, Environment and Rural Development (MITADER), and the Food and Agriculture Organization (FAO) for their valuable contributions. All photos are from the World Bank and Andrea Borgarello unless stated otherwise. 4 Contents Summary2 Forests in Mozambique: A Snapshot 6 Forests: Local Communities, National Economy, and Global Environmental Services 7 Forests and Rural Poverty Among Local Communities 7 Forests and the National Economy: The Timber and Wildlife Industry 9 The Timber Industry 9 National Wood Production and Consumption  11 Commercial Forest Plantations 12 The Wildlife Industry 13 Forests and Global Ecosystem Services 14 Ecosystem Services 14 Forests, Biodiversity and Tourism 15 Current Challenges and Opportunities for Forests in Mozambique 17 Opportunities 20 World Bank Engagement: Sustainable Rural Development through Integrated Landscape Management 24 Recommendations and Conclusion 27 Policy Recommendations 27 Resource Mobilization 28 Conclusion 29 Boxes Box 1: Actors in the landscape—Private sector 9 Box 2: Reforestation—Multiple use 12 Box 3: Portucel and IFC  13 Box 4: Parks and Wildlife as Economic Engines 13 Box 5: Endemic biodiversity in Mozambique’s Forests—the afro-montane Mabu and Lico forests and coastal forests of Northern Mozambique  14 Box 6: Actors in the Landscape—Government 19 Box 7: FNDS and Technical Assistance through the Multi-Donor Trust Fund (MDTF) for Integrated Forest and Landscape Management  21 Box 8: Forest Sector Reforms under MITADER 22 Box 9: Actors in the Landscape—Civil Society 23 Box 10: Actors in the Landscape—Academia 23 Box 11: Emission Reduction Payments under the Zambezia Integrated Landscape Program (ZILMP) 25 Maximizing Finance for Development with ILM support Box 12: 26 5 Forests in Mozambique: A Snapshot Forest Definition: 30% canopy cover with a minimum height of 3m height, covering an area of over one ha. The forest sector contributes greatly to Mozambique’s GDP. In 2011 the sector contributed about US$330 million to Mozambique’s GDP in 2011, directly employing 22,000 people, and in 2016, it represented about 13.7% of GDP. There are two forms of commercial harvesting for natural forests: forest concessions and simple licenses. In 2017, 193 forest concessions and 624 simple licenses were issued. The average Annual Allowable Cut for precious and first-class species in 2017 was about 446,000m3. Mozambique’s natural forests cover an area of about 34 million ha: equivalent to 43% of the country’s territory, these forests store approximatly 5.2 billion tCO2eq of carbon. Mozambique has an estimated 300,000 ha of mangrove forests but from 2003 to 2013, about 156 ha was lost annually. Mangrove loss is caused by urban and agricultural expansion, coastal erosion, and the extraction of fisheries and wood for commercial use. Mozambique’s National REDD+ Strategy aims to reduce deforestation by 40% and restore one million ha of forests by 2030. The NDC sets targets for greenhouse gas emission reductions of 23MtCO2 from 2020 to 2024 and 53 MtCO2 from 2025 to 2030. A series of reforms have been undertaken in the sector since 2015, including the revision of the policy and legal frameworks, creation of a new institution for forest law enforcement, and a ban on log exports. Deforestation shows a declining trend. From 2003 to 2013, 267,000 ha were lost each year, at a rate of about 0.79% accounting for 57% of the country’s total GHG emissions. From 2014 to 2016, 86,000 ha were lost each year, at a rate of about 0.36%. Figure 2 (above): Forest cover in Mozambique. Source: Land Use and Land Cover, MITADER (2018) Figure 3 (left): National deforestation between 2003-2016. Source: MITADER (2018) 6 Forests: Local Communities, National Economy, and Global Environmental Services Forests and Rural Poverty Among Local Communities Poverty in Mozambique is concentrated in the rural areas and in the Central and Northern regions. Zambezia and Nampula, two target provinces of the government’s integrated landscape management programs, experience both the highest rates of poverty (IOF-2014/2015) and high rates of forest loss (Figure 4). Poverty reduction and inclusive growth require the sustainable use of natural resources, particularly in rural areas. Forests are a key resource for rural communities, providing goods and services that meet their needs and can foster the growth of their income. The miombo forests have the potential to improve livelihoods by providing essential food, energy, shelter and medicines for local communities.3 Construction materials, like timber for houses, fences, and granaries and grasses for thatched roofs, can be sourced. Natural fibers provide the raw materials for necessities like baskets, ropes, clothing, nets, brooms, and mats. Non-timber products have income- generation potential. Forests also act as a safety net for populations by offering secure access to resources and services critical to their food security. Wood and charcoal are critical for household energy needs, with biomass accounting for 80% of total energy consumption in Mozambique. Fuelwood is used in rural areas, while charcoal is Figure 4: Bivariate map of poverty and forest cover loss. The provinces of utilized in peri-urban areas, supplying energy for 76% Cabo Delgado, Zambezia, and Nampula are priorities for MITADER. The of households in Mozambique’s capital of Maputo and latter two experience high poverty levels and forest loss. Matola, an urban center neighboring it. Charcoal is an important source of income derived from forests. The most important food crops are cassava and Mozambique’s National Biomass Strategy (EUEI maize, followed by sorghum and rice. Only an 2012) indicates that the charcoal industry generates estimated 16% of rural households engage in cash jobs in rural areas for 136,000 to 214,000 people. crop production. Agriculture, a major source of livelihood and a Agricultural value chains can form the backbone land use predominant in rural areas, is highly of a rural economy as they create jobs, increase dependent on natural resources. About 3.9 million rural income, strengthen food security, and households cultivate an area of about 5.1 million ha facilitate better nutrition. (out of 36 million ha), mostly practicing subsistence agriculture on plots that average about 1.3 ha.4 3  Campbell, B M et al. Miombo Woodlands—Opportunities and Barriers to Sustainable Forest Management in Observatory (2007) 4  IAI (2012) and Agriculture and Livestock Census (CAP) (2010) 7 Agricultural production benefits from a range of natural resources have been strengthened through environmental services generated by forests, such community land delimitation. as maintaining steady flows of water. Sustainable agricultural practices, such as conservation agriculture As of 2017, a total of about 1,020 communities have and agroforestry, take this interdependence into been delimited, and about 500,000 individual land use account and seek to increase agricultural productivity licenses (Direito de Uso e Aproveitamento da Terra— while strengthening the resilience of natural resources. DUATs), have been issued.7 Non-timber forest products (NTFPs) are a resource for livelihoods of the rural poor. About 6,850 formal Box 1: Actors in the landscape—Private sector and 189,000 informal small and medium enterprises trade in NTFPs, such as honey, handicrafts, charcoal, The private enterprises in the forest sector are and firewood.5 NTFP trade occurs primarily in the predominantly small and medium businesses (each informal sector through family- or community-based employing less than 50 people), which account for initiatives but is an important activity in the sustainable 95% of formal sector businesses and 99% of informal production of forest goods and income generation. sector operations.1 Forest enterprises operate across There remains a wide range of products that have different stages of the timber value chain. There are potential entry to commercialization. A study in timber producers, primary processors (sawmills), and Zambezia, Nampula, and Cabo Delgado found a wide secondary processors (such as carpentry workshops, range of 47 NTFPs with varying degrees of need furniture factories). for investment, market potential, and requirements National and international forest enterprises for research and development.6 They cover value operate in Mozambique. Obtala Limited is one large chains for food, essential oils, cosmetics, construction, international firm operating in Zambezia province handicrafts, and hygiene products. Common examples and it has a Memorandum of Understanding signed are baobab, moringa, and bamboo. with FundInvest SA, a state-owned enterprise, for the export of timber. There are about 120 Community-based natural resource management Chinese companies across the country, including is a necessary strategy to promote the dual concessionaires and traders. Larger national objectives of sustainable natural resource enterprises include LevasFlor and TCT Indústrias management and rural development. The majority Florestais. These companies tend to have more of Mozambique’s rural communities depend on integrated value chains, incorporate sustainability natural resources for their livelihoods. The active in their operations, and engage in initiatives beyond engagement of communities in natural resources timber that involve local communities. LevasFlor is management—in forests, wildlife, and fisheries—has the only Forest Stewardship Council (FSC)-certified shown to be an efficient and effective tool in ensuring company in the country. Smaller national enterprises the sound management of these resources. tend to be focused on short-term gains, with little consideration for sustainability integrated into their Strong local institutions and rules that govern the management. Forest operators are organized into resources are needed—in particular, the recognition associations at several levels, although the sector is of the rights communities have to the resource, not sufficiently consolidated for the associations to be so that community members can benefit from the effective, and how representative the associations are management of it. Security of resource access allows of their members is debatable. At the national level, a balance of rights and obligations, tying benefits the Mozambican Association of Timber Operators from the resource to the quality of its management. (AMOMA) engages frequently with the government. In Mozambique, community rights to land and to 5  Nhancale, B. et. al, Small and medium forest enterprises in Mozambique, IIED (2009) 6  Assessment of Non-Timber and Non-Wood Forest Products Value Chain in the Zambezia, Nampula and Cabo Delgado Provinces, Mozambique, PhytoTrade (2016) 7  MITADER (2018) 8 Forests and the National Economy: The Timber and Wildlife Industry The Timber Industry At the national level, forests are an important and chips and particles (remaining 4%).9 About 90% contributor to the economy, generating income of timber exports went to China in 2013. The export and employment, as well as important raw market is dominated by Chinese companies and is materials to fuel Mozambique’s growth and highly selective, focusing on: Dalbergia melanoxylon development. In 2011, the forest sector contributed (local name pau preto); Pterocarpus angolensis about US$330 million to Mozambique’s GDP and (umbila); Afzelia quanzensis (chanfuta), and Millettia directly employed 22,000 people. In 2016, the sector stuhlmannii (jambire). In the domestic market a contributed about 13.7% to Mozambique’s GDP. slightly wider range of species is accepted, although preference is still given to the premium species.10 The World Bank conducted a global analysis in 2018 on the importance of various types of wealth—produced capital, human capital, and natural capital—to a country’s economy.8 In Chanfuta, umbila, and jambire are the most-used Mozambique, renewable natural capital—that species, forming 85% of the wood used in domestic is, wealth from renewable resources—forms the consumption, followed by metonha, metil, messassa, largest component of national wealth. This means missanda, and messinge.11 However, more than that renewable natural resources such as forests, 100 species are listed as having the potential for protected areas, and cropland are significant commercial timber. The average Annual Allowable Cut assets that can support further growth and wealth (AAC) for precious and first-class species in 2017 is accumulation in the long-run, if managed sustainably about 446,000m3, based on the recently concluded now. Other sources of natural capital include non- National Forest Inventory.12 renewable resources, such as fossil fuels and minerals. Presently two forms of commercial harvesting exist for natural forests: forest concessions and Of the renewable natural resources possessed simple licenses. The number of forest operators by Mozambique, forests are the second-largest varies annually. In 2017, 193 forest concessions contributor to natural capital after cropland. Figure and 624 simple licenses were issued.13 Licensed 5 shows that natural capital from forests has over concessionaires have the right to harvest and time constituted a smaller share of the total due to transport timber according to the AAC specified in the higher growth of wealth from other resources, the approved management plan. The management especially cropland. However, the absolute value of timber varies considerably with respect to the of forest natural capital has increased over time, area licensed to forest concessionaires. The actual showing it remains a resource for the country. productive area can range from 50% to 90% of the whole concession area. Likewise, the AAC varies Mozambique’s high-quality timber is valued on substantially but is generally very low (< 0.2 m3/ha international markets, but more recently has been per year), reflecting the low density of the miombo exported mostly to the Chinese market. Exports forest. Investments in assets and infrastructure are in the form of logs (74% of timber/wood exports vary between the two license types, with forest 2013), followed by sawn wood (21% in wood exports), concessionaires usually investing more substantially 8  The Changing Wealth of Nations 2018: Building a Sustainable Future. https://www.worldbank.org/en/news/infographic/2018/01/30/the-changing-wealth-of-nations 9  Global Development Solutions (2016) 10  Financial analysis of the natural forest management sector of Mozambique, UNIQUE (2016) 11  Assessment of harvested volume and illegal logging in Mozambican natural forest, Faculty of Agronomy and Forest Engineering (FAEF), University of Eduardo Mondlane (2013) 12  NFI report, DINAF, 2018 13  DINAF, 2017 9 in heavy machinery to harvest and transport logs, and in the facilities required by regulation for forest concessionaires only. Mozambique has about 200 sawmills, of which 47% are complemented by artisanal carpentries.14 Sustainable forestry operations are not financially viable under current market conditions and because of illegality in the sector, with limited incentives for the integration of sustainability measures, such as silviculture, reforestation, or value-added processing. Unsustainable practices remain profitable, thus there is little incentive to improve the management of timber or increase the value of the resource locally. Economic analysis of the value chain of wood has confirmed there is net profit along the entire value chain, with prices varying only by product and point of sale, estimated at US$32/ m3 in the forest, US$44–81/m3 of sawn timber for the domestic market, and US$61–115/m3 of sawn timber for the export market.15 This illustrates that it is equally profitable to sell logs to sawmills or to sell sawn timber, thus discouraging operators from doing any processing. Figure 5: The value of national capital in Mozambique between 1995 and 2014 This profit scenario is based on the case commonly the norm that no costs are being incurred for Private sector management decisions need to be based silvicultural treatments or for other practices that could on sound data and planning, maximizing forest utilization add to the sustainability of the operation. and the integration of silvicultural practices. New, viable value chains and markets should be explored for Improving the sustainability of the sector will value-added products and certified timber. Searches require interventions in three areas: strengthening for a wider range of species, not currently considered the enabling environment; supporting improved marketable, could be undertaken. New markets management practices; and developing value for certified wood should also be explored. This is chains and markets for a new range of products. because investment in value addition and infrastructure Government capacity needs to be strengthened to can sustain or even raise their profitability despite the monitor forest management standards and regulations additional costs involved, if these are accompanied by (and ensure they are implemented), to curtail illegal technical know-how, access to finance, and market logging (and any unfair competition associated with development. As shown in Figure 7, the current timber it), and to review the licensing system (including the production system is limited in terms of the types of ‘chain of custody’ systems). products and export destinations, with little investment being made in processing facilities for higher-value Long-term planning should determine areas for wood products. specific uses, such as for conservation units, national forest reserves, and those available for commercial In terms of utilized wood volume, charcoal licensing. Harvesting volumes need to be licensed is probably the most important product of based on sustainable yields, and on the projections Mozambique’s forests. The charcoal value chain made for future stocks, which should be ascertained is highly important for local communities, although with the best science available. Sustainable forest the charcoal business is largely informal—only about management practices, which could be certified 5% of the charcoal sector is thought to be formal.16 by third parties, need to be promoted, and private When license fees and the government’s reforestation operators provided with incentives and technical tax are not being paid, the net revenue for a ton of support toward sustainability, as well as incentives for charcoal ranges from about US$5-21, depending on value addition. whether the point of sale is along a forest road or farther away in an urban center. 14  Global Development Solutions (2016) 15  UNIQUE (2016) 16  Sustainable Charcoal Value Chain Mozambique, Energy Engineering Solutions (2014) 10 By law, charcoal producers and transporters or produced, and a single producer can legally produce wholesalers are required to have a license. For a maximum of 1,000 bags per year, earning them producers, this costs about US$1 per 70kg bag a total annual income of up to US$1,000 from charcoal. Most producers, however, do not have licenses and operate informally. Production is diffuse and decentralized, and the enforcement of even the limited number of rules in place hardly occurs. Transporters are more likely to have licenses as the movement of trucks is easier for government authorities to control, largely through checkpoints on the roads. Transporters with no license or those carrying volumes of charcoal exceeding the volumes permitted are fined about US$667 a load. Current charcoal value chains are therefore inadequately controlled and unsustainable, and a major driver of forest degradation. First-, second-, and third-class species of trees are often harvested, which the law prohibits. National Wood Production and Consumption The volume of wood licensed as good as doubled from 130,000 m3 in 2015 to almost 250,000 m3 in 2017.17 These figures indicate the growing trend of Figure 6: Characteristics of simple licenses and forest concessions. Source: DINAF (2017) timber harvesting and do not even include volumes that are illegally harvested, which are estimated at about six times the volume licensed.18 It should be noted that the largest number of licenses are issued in the provinces of Cabo Delgado, Zambezia, Tete, and Sofala. Domestic wood consumption is estimated at about 257,000 m3/year, an amount close to the volume licensed in 2017. Domestic timber markets are expanding, with the fast-growing construction industry and the expansion of the electricity grid the largest consumers of timber in the country. The current domestic timber supply is insufficient to cover these growing demands, making it necessary to import poles for transmission lines and construction timber. Since most timber produced is exported in logs (not poles), most processed forestry products consumed in Mozambique are imported. Domestic consumption of processed wood is composed mainly of imports from neighboring South Africa and Portugal. In 2013, Mozambique imported US$16 million in slabs, panels, plywood, and ceiling boards; US$9 million in plywood and laminates; US$8.5 million in doors and window frames; US$6 million worth of particle board; and US$5 million in boxes and pallets, especially paper, particle board, plywood, and other furniture.19 Figure 7: Current timber value chains. Source: Adapted from UNIQUE (2016) 17  DINAF reports (2017) 18  Avaliação das perdas de receitas devido a exploração e comércio ilegal de madeira em Moçambique no período 2003 – 2013, WWF (2015) 19  Global Development Solutions (2016) 11 Box 2: Reforestation—Multiple use The Government of Mozambique is promoting reforestation for multiple use. The National Reforestation Strategy (2009) identifies the role of reforestation for energy, conservation, and community use. Mozambique has signed up to the African Forest Landscape Restoration Initiative (AFR100), a regional land restoration initiative, and pledged to restore 1 million ha of degraded lands. In June 2018, the Ministry of Land, Environment and Rural Development (MITADER) finalized an assessment based on the Restoration Opportunities Figure 8: Expected demand for harvested wood products in 2040 and the corresponding productive forest area needed. Source: Harnessing the Assessment Methodology (ROAM)24 across the 10 Potential of Productive Forests and Timber Value Chains for Climate Change districts in Nampula and Zambezia targeted by The Mitigation and Green Growth: Opportunities for Private Sector Engagement, UNIQUE (2016) Sustenta Project. The assessment resulted in the prioritization of about 995,019 ha in Nampula and The supply gap for timber products continues 644,942 ha in Zambezia for restoration. The results to grow. Analyses project that Mozambique’s demonstrate that about 60% of Mozambique’s NDC consumption of harvested wood products (sawn wood, commitment to the UNFCCC could be achieved in wood-based panels, paper and paperboard, and seven years if landscape restoration takes place industrial round wood) will have grown from 2.4Mm3 across the suggested intervention areas. The in 2014 to 6.3Mm3 in 2040. The projected industrial analysis showed that new forest plantations offer round wood supply gap is 3.7Mm3 by 2040 (Figure more opportunities of employment and more carbon 8).20 This dynamic highlights the opportunity to improve sequestration potential, while agroforestry and the country’s production capacity, the quality of its natural forest rehabilitation have high employment natural forest products, and its potential for commercial but medium carbon sequestration potential. plantations, which could reduce the amount of pressure MITADER is promoting forest restoration through currently being placed on natural forests and help meet technical assistance and the provision of inputs for domestic demand for timber products. emerging farmers as a condition for gaining access to matching grants for value chain development. It is also making performance-based payments for Commercial Forest Plantations the development of sustainable plantations by small and medium growers. The plantation sector in Mozambique is promising and has been identified as a focal area for economic development by the government. The National However, key conditions for investment— Reforestation Strategy targets restoring one million ha production costs, market access, and the by 2030. An estimated 3.5 million ha are considered enabling environment—can be improved suitable for forest plantations in the central and northern to increase the business climate and areas of the country.21 Mozambique has adequate competitiveness of the sector. Production costs are conditions for expanding multipurpose plantation affected by growth potential, land access, and labor forestry, including a growing demand for forest products availability. Natural, climatic conditions and geography and the availability of land. Increasing the country’s lead to low productivity per ha of 20 to 35 m3 per ha forest plantation area from the current 60,000 ha to more per year, lower than in neighboring South Africa and than one million has by 2030 would have the potential to much lower than the highest rates achieved in Latin create 250,000 jobs and produce US$1.5 billion worth of America. Growth rates can however be increased with manufactured products and exports.22 proper research. An already high and still growing domestic demand for wood products provides a Mozambique is well positioned to supply the markets domestic market, but an environment must be created in neighboring countries in Southern and Eastern to enable the sector to produce at internationally Africa, and has a comparative advantage accessing comparable costs. key markets in Asia. 20  A historical, 10-year analysis of wood consumption, population growth, and industrial sector GDP resulted in correlation factors that were used for the projection of wood product consumption until the year 2040. Policy assumptions were quantified to develop a green growth scenario for consumption of wood products until 2040. Source: Harnessing the Potential of Productive Forests and Timber Value Chains for Climate Change Mitigation and Green Growth: Opportunities for Private Sector Engagement. UNIQUE (2016) 21  National Reforestation Strategy, MITADER (2009) 22  National Reforestation Strategy, MITADER (2009) 12 Box 3: Portucel and IFC enabling environment and framework for investments; and private actors including smallholders to provide Portucel is making the largest single investment in the investment. rural areas in Mozambique. The company has a licensed area (DUAT) of about 356,000 ha, of which Portucel and the International Finance Corporation, 246,000 ha is expected to be planted. Portucel is which is part of the World Bank Group, are developing eucalyptus plantations into a mosaic collaborating with the Government of Mozambique landscape of forestry blocks interspersed with and World Bank through the planted forests grant houses, agricultural fields, high value conservation scheme under the Mozambique Forest Investment areas, and land for other protected uses. The Project, in particular in the design of models for first-phase of investment has received about technical assistance to outgrowers. US$32.0 million in funding from IFC, including the cost of advisory services focused on their community development program that covers 6,000 The Wildlife Industry households and 115 communities. The company has planted 13,200 ha so far, and faced challenges While the potential of the wildlife industry in in accessing more land to expand the planted area. Mozambique has not been fully explored, it could The company is now looking into other business well benefit conservation, local communities, models, including outgrower schemes. and the national economy. The sustainable use of wildlife through activities such as trophy hunting, Managing company–community relations is a game sales, and tourism could lead to the higher challenge—companies have to undergo long and valuation of forests as habitat and thus incentivize intense negotiations with communities in order to get their protection while generating jobs and revenue a land use license and the correct procedures for for local communities involved in the management doing so remain tenuous and lacking in government of wildlife resources. The wildlife economy could orientation.23 become a significant growth area for the national economy (Figure 5 and Box 4). Mozambique has 11 Investors reflect on the need for clarity concerning hunting concessions (coutadas) and a number of the rules on forest conversion, as well as on the wilderness farms, most of them managed privately rights of companies to access land and the process or through partnership arrangements between the for obtaining a license or DUAT. Such risks related government, private operators, and communities. to land have deterred investors. Mozambique lacks These areas could be developed into community- skilled labor and adequate technologies. Developing a managed enterprises, with strong partnerships thriving, planted forests sector is a long collaborative offering opportunities for multiple benefits from wildlife. process that will require inputs and commitment from all stakeholders: the public sector to improve the Box 4: Parks and Wildlife as Economic Engines The potential for direct income generation for communities from wildlife in Mozambique can gain inspiration from Namibia and Zimbabwe, two countries that have seen great success in community-run wildlife management programs. In Namibia, community-owned businesses and joint ventures, particularly in tourism and hunting, have been highly profitable. The total cash income and in-kind benefits generated in community conservancies grew from less than US$90,000 in 1998 to US$10 million in 2016. In this period, community conservation contributed about US$500 million to Namibia’s national income. In Zimbabwe, the CAMPFIRE program has increased direct revenue to communities since its inception in 1989. CAMPFIRE generated about US$12 million from Above: Women prepare seedlings for use in plantations in Nampula 2009 and 2016, with communities receiving US$6.4 Province, northern Mozambique. million, about 54% of the total. 23  Improving the Business Climate for Planted Forests in Mozambique, UNIQUE (2016) 24  More information on ROAM may be found at: https://www.iucn.org/theme/forests/our-work/forest-landscape-restoration/restoration-opportunities- assessment-methodology-roam. 13 Forests and Global Ecosystem Services Ecosystem Services Mozambique is richly endowed with natural resources. Of its total area of 80 million ha, Box 5: Endemic biodiversity in Mozambique’s 36 million ha is arable land, and 34 million ha Forests—the afro-montane Mabu and Lico is natural forests, of which 17 million ha is forests and coastal forests of Northern categorized as productive forest. These cover a Mozambique variety of forest ecosystems, including the coastal forests in southern Mozambique, afro-montane forests Scientific expeditions to Mt. Mabu, a montane inselberg in central Mozambique, and coastal dry forests in in Northern Mozambique led to the discovery of a northern Mozambique. Miombo woodlands represent 7,880ha block of undisturbed rainforest of a forest the most extensive forest ecosystem in Mozambique, type not well represented elsewhere. Ten new species comprising about two-thirds of the country’s forested (plants, mammals, reptiles, and butterflies) have been land. Miombo is the dominant forest type in several discovered, based on biological surveys done of only central and northern provinces, including Zambezia, 20% of the forest. Hence it is expected that with further Nampula, and Cabo Delgado, where most of investigation more species will be found. Mt Mabu Mozambique’s poor reside and rely on the woodlands is important for rare birds and supports a variety of for basic necessities.25 endemic and restricted-range species. The forests on Mt Mabu store significant forest carbon.29 In 2018, Forests provide significant ecosystem services a rainforest in a volcanic crater of Mount Lico was of global value, including carbon sequestration explored for the first time, leading to the discovery of and storage. Due to its unique ecology, the climate new plant and animal species.30 The coastal forests of mitigation potential of miombo woodland has global Eastern Africa stretch along the Indian Ocean coastline significance. Dominated by species from the genera from Somalia to Mozambique. The largest remaining Brachystegia, Julbernardia, and Isoberlinia, miombo extent of them are reported to be found in Mozambique grows slowly due to low rates of nitrogen and and are considered by Conservation International to be phosphorus uptake (constrained mainly by soil moisture, a global biodiversity hotspot. This area of high diversity largely from rainfall) with net primary production capped and endemism is being placed under increasing at 900–1,600 g m2 per year. Miombo resists moisture threat. A study conducted in Cabo Delgado in 2011 loss and its leaves have high tannin content. This concluded that the high proportion of range-restricted constrains use by herbivores; only large ungulates, like species, the limited extent of the forest patches, and the elephants, can process the material. Unless completely increased threat to the area show these forests deserve uprooted, miombo regenerates readily by coppicing from international conservation concern.31 A landscape or stumps and rootstock after disturbance. Given that dry ecosystem-level conservation response is needed to season fires burn a third of the miombo landscape on conserve the full range of forest types and species. average every year, this resilience is exceptional.26 For this reason, the woodlands can act as a stable carbon dioxide (tCO2)/ha27). The total above- and below- sink. Miombo forests constitute important reservoirs of ground carbon stock in Mozambique is estimated at above- and below-ground carbon (at 227 total carbon more than 5.2 billion tCO2.28 293031 25  The Earth Scan Forestry Library. The Dry Forests and Woodlands of Africa. Ed. Chidumayo, E N and D J Gumbo, London: Earth Scan Publishing (2010) 26  Scholes, M C and M O Andreae. Biogenic and Pyrogenic Emissions from Africa and their Impact on the Global Atmosphere in Ambio. 29(1) (2000) 27  Study on the Zambezia Integrated Landscape Management Program, EtcTerra (2016), figures being updated. 28  From Linha de Referência, Monitoria, Relatório e Verificação para o REDD+ em Moçambique, Sitoe et al. 2013, based on the 2004 national forest inventory, using IPCC Tier 1 calculations. 29  The discovery, biodiversity and conservation of Mabu forest—the largest medium-altitude rainforest in southern Africa, Bayliss et. al., Oryx, 48(2), 177–185 (2014) 30  Mozambique: the secret rainforest at the heart of an African volcano, The Guardian, 17 June 2018 31  Coastal dry forests in northern Mozambique, Timberlake et. al, Plant Ecology and Evolution 144 (2): 126–137 (2011) 14 This carbon store is central to the country’s climate Mangrove loss is caused by urban and agricultural change mitigation commitments. Forests reduce the expansion into coastal areas, coastal erosion, and the probability and effect of natural disasters, as has been extraction of fisheries and wood resources for commercial documented in the Licungo (Zambezia) watershed. use. Hence, well-managed forests can increase local communities’ resilience to climate risks. The forest ecosystems are internationally recognized biodiversity hotspots and habitat for a variety The woodlands play an important role in regulating of plants and animals, including birds and large natural water supplies by maintaining water flow and terrestrial mammals, some of which are endangered water quality and protecting land from soil erosion. and endemic to Mozambique. However, wildlife As most of Mozambique’s major river basins are located numbers of species such as elephants have declined and or have their headwaters in forests, hydrology underpins continue to be under threat from poaching. At the same the country’s actual and potential agricultural productivity, time, as humans move into elephants’ range and habitat, and enhances the adaptive capacity of rural communities the risk of human–wildlife conflict increases, which further to climate-related stressors such as drought and floods.5 threatens their numbers. Forests have a key role in filtering the water that enters streams, and thus play a key role in the quality and quantity of water. Forests, Biodiversity and Tourism Mozambique has an estimated 300,000 ha of There is a very strong nexus in Mozambique between mangroves,32 about 28% of which occur in the tourism’s potential, prospects for poverty alleviation, Zambezi Delta, constituting the largest mangrove and biodiversity conservation—for which forests are area in Africa and the 13th globally.33 Mangroves boast key. Mozambique’s travel and tourism industry is the third a diversity of marine life and are vital for their role as a largest investment sector in the country, contributing to highly productive nursery for fish and prawns, cultivated 3.2% of GDP in 2013 but expected to grow exponentially, by coastal communities for subsistence and profit.34About with the country predicted to be one of the ten fastest- 850,000 households, or 20% of the population, rely on growing destinations for leisure travel spending between fisheries for some part of their income, and employment 2016–2026, and visitor arrivals to increase by 8% in the sector has increased by 260% since 2002, annually. The industry relies heavily on its rich natural due in part to the development of processing and resource base and, given that nature-based tourism commercialization. (sometimes known as NBT) is anticipated to be one of the largest global tourism growth areas in coming Fish is a key component of the Mozambican food basket, decades, the sector is regarded as a key economic comprising 27% of protein consumption. Mangroves priority for Mozambique. enhance neighboring ecosystems like coral reefs and seagrass beds, offering opportunities for eco-tourism. Nature-based tourism could contribute more to GDP, However, mangrove forests are experiencing loss: up boosting export and tax revenues, employment to 2010, there was mangrove loss, but an increase in opportunities for the rural population, income to mangrove cover has been registered since 2010. Between communities involved in the supply chain, and indirect 2003 and 2013, about 156 ha was lost annually.35 benefits through the spending of direct income. 32  NFI, MITADER (2018) 33  Status and distribution of mangrove forests of the world using earth observation satellite data. Global Ecol. Biogeogr., 20,154159. Giri et al. Giri, C., Ochieng, E.,Tieszen, L.L. (2011) and Landscape-scale extent, height, biomass, and carbon estimation of Mozambique’s mangrove forests with Landsat ETM+ and shuttle radar topography mission elevation data, Journal of Geophysical Research, 113: G02S06, Fatoyimbo, T. E., M. Simard, R. A. Washington-Allen & H. H. Shugart (2008) 34  World Wide Fund for Nature (WWF). East African Mangroves in The Global 200: The most outstanding and representative areas of biodiversity (2017). 35  Historical Activity Data Analysis in Mozambique, MITADER (2018) 15 Mozambique is covered by a network of It builds on assets linked to local communities, so that Conservation Areas (CAs)36 that make up 25% adequate compensation for protection of these natural of its land surface and of which forests are an assets serve as a safety net for some of society’s essential component. Conservation Areas constitute poorest communities. In addition, CAs can be an a unique asset in terms of biodiversity, ecosystem effective strategy for forest protection, as in the case services, and support to livelihoods of the many of Gilé National Reserve: deforestation within the rural communities living in these landscapes. This Reserve was found to be lower than the area outside network of CAs represents a clear comparative of the Reserve’s boundary (Figures 10 and 11). advantage for Mozambique to develop nature-based tourism, which could help the country generate Given the mutual dependence of nature-based sustained economic returns from its rich biodiversity tourism and biodiversity, it is important that and ultimately ensure the preservation of natural tourism-related policies and investments are assets the industry depends on, while supporting the formulated in ways that also lead to conservation financial sustainability of the management of CAs and and, as such, ensure the parallel achievement of generating benefits for the poor. pro-poor, environmentally sustainable goals. The World Bank is supporting this agenda through the Nature-based tourism is potentially linked MozBio Program37, aimed at ensuring the sustainability to poverty alleviation, as it generates labor- and protection of Mozambique’s natural resources, intensive employment, and often contributes to including its rich forests. Nature-based tourism is gender equality due to the high proportion of promoted as a means to preserve Mozambique’s women employed. It can also create new market valuable natural assets, and a key contributor to the opportunities for local producers, demand for locally financial sustainability of CAs, generating economic produced inputs, and scope for off-farm diversification. and social returns for the country. Figure 10 (left): Forest map of Zambezia province, showing low deforestation in the Gilé Reserve. Figure 11 (above): Deforestation rates in the Reserve and surrounding districts show the contrast in and outside of the Reserve’s boundaries. Source: Historical Activity Data Analysis in Mozambique, MITADER (2017) 36  Specifically, the network of Conservation Areas consists of seven National Parks, ten National Reserves, one Environmental Protection Area, seventeen Controlled Hunting Blocks (coutadas), over fifty privately-run Game Farms (fazendas de bravio), and two Community Reserves. 37  MozBio2 is currently under implementation, with a follow-on MozBio2 project due. 16 Current Challenges and Opportunities for Forests in Mozambique Challenges Deforestation by Province Between 2001–2016 Although Mozambique’s forests have tremendous value and there is potential to maximize benefits locally and globally, they are being rapidly Thousands of hectares depleted. The country lost around 267,000 ha of forests every year from 2003 to 2013, which represents a historical deforestation rate of 0.79%.38 This has led to around 40 million tons of greenhouse gases being emitted every year into the atmosphere, which represent 57% of Mozambique’s overall emissions. From 2014 to 2016, annual loss declined to about 86,000 ha, a rate of 0.36%.39 Trends in recent years show a decrease in deforestation. National Deforestation Between 2003–2016 Forests are lost because of a combination of direct and indirect drivers linked to several sectors, primarily small-scale agriculture. Thousands of hectares Forest conversion to agriculture is the dominant driver of deforestation (65% of total deforestation), led by shifting subsistence cultivation (slash-and- burn agriculture, often resulting in the uncontrolled spreading of fires), followed by urban expansion and infrastructure development (12%). As for forest degradation, the key drivers include forest extraction for biomass energy (particularly charcoal for urban use), and unsustainable timber harvests Figures 12 and 13: National deforestation in Mozambique from 2003–2016 and (including illegal logging) to supply both domestic and Deforestation by province. Source: MITADER (2018). international markets. 40 The indirect drivers that contribute to agriculturally based population density increases in deforestation and forest degradation in and close to forested areas, which is happening in Mozambique include insecurity over land several areas of Mozambique. tenure, inadequate planning for land use, and demographic pressure. Land tenure insecurity While deforestation rates have fluctuated, forest discourages investment in longer-term assets with loss has occurred over time. There has been a limited to no immediate returns, including forests large decrease of forest cover since 1980, when and other natural resources. This dynamic is made around 89%41 of the country was covered by forest, worse by demographic pressure, particularly when compared to 43% today (Figure 15). 38  Data from the 2018 NFI, under validation 39  Deforestation data is based on the time period of 2003-2013 and then 2014-2016, because this is an update from the 2007 National Forest Inventory which covers the period of 1991-2002. The National REDD+ Strategy was then approved in 2015 taking into account data until 2013. The most recent deforestation data available is from 2016. 40  Identificação e análise dos agentes e causas directas e indirectas de desmatamento e degradação florestal em Moçambique, Winrock and CEAGRE (2016) 41  Based on the first National Forest Inventory in 1980. The definition of forests has changed over the different inventory periods, so the values are not 17 The Annual Allowable Cut (AAC) should provide trust among stakeholders and limited benefit sharing a critical piece of information to help the with local communities. Illegal logging is widespread. Government of Mozambique make informed Forgone tax revenues were estimated at US$540 million decisions on forest management. The decreasing between 2003 and 2013 from unreported wood exports AAC value over time suggests that the availability of (mostly logs), mainly to Asian markets.42 MITADER, the harvestable forest resources has reduced. Ministry of Land, Environment and Rural Development, conducted a separate assessment of forest operators43 The forest sector in Mozambique suffers from that revealed a low level of compliance with even the chronically weak governance, further fueling forest minimum forest management An average of legal, and of 267,000 ha forest environmental, were lost loss. A participatory forest governance assessment was standards. and socialannually between 2003–2013 due to: conducted in 2016 in two provinces using the PROFOR- FAO tool (see Results in Figure 17). The assessment 4% Other showed there was consensus among stakeholders that 4% Commercial 65% governance was weak, particularly around institutional Slash and burn agriculture capacity and the implementation of laws and regulations. agriculture Forest law enforcement is absent and forest crimes often 7% Fuelwood go unpunished, permitting widespread illegality. Forest sector policies contradict those in other sectors, and 8% Wood measures to combat corruption are not systematically products applied. Stakeholder participation in planning and 12% Urban expansion decision-making in the sector is low, particularly with Figure 14: Key drivers of deforestation. An average of 267,000 ha of forest the inclusion of women. This has resulted in limited were lost annually between 2003-2013. Source: Winrock and Ceagre (2016). directly comparable, but they provide a means for general comparison. 42  Avaliação das perdas de receitas devido a exploração e comércio ilegal de madeira em Moçambique no período 2003–2013, WWF (2015) 43  This evaluation was conducted in 2016 with involvement of the local university and civil society groups. Co-financed by the World Bank and WWF, it serves as a key indicator for the sector. 18 Inventory Forest Area % Forest Cover AAC (m3/year) NFI1 (1980) 70,922,980 88.6% - NFI2 (1994) 66,128,229 77.6% 527.866 NFI3 (2007) 40,068,000 50% 515,672 NFI4 (2017) 34,171,686 42.7% 446,728 Figures 15 and 16: Historical forest cover and forest cover percentage in Mozambique over time and the associated AAC, as determined in the National Forest Inventory. Source: NFI (1980, 1994, 2007, 2017) Current forest management practices undermine the sustainability of the resource base. Current practices focus only on a few species and the volumes harvested of these selected species are not sustainable. The resource degrades and devaluates gradually. Investments in silviculture are virtually absent, and the efficiency of operations is low. Most businesses do not employ forest technicians and use outdated equipment and processing techniques with the exception of a few operators who are making a serious effort to improve the efficiency, recovery, and value addition of timber harvesting. Figure 17: Results of the forest governance assessment, by Pillar of the The government’s capacity to enforce the law assessment framework is limited. Its information management system is currently analog, but a digital system is under development that would improve the reliability of statistical data and data transparency. Box 6: Actors in the Landscape—Government Weak governance hinders effective public The management of productive forests falls under participation and social accountability, which the jurisdiction of two ministries—MITADER, leads to non-inclusive decision-making around which is responsible for the use and conservation natural resource use and the erosion of trust policies of natural forest resources and wildlife in among stakeholders. A forest forum is being created so-called productive forests, as well as for multiple that could increase the participation of stakeholders in use, forest conservation and carbon stock; and the forest-related issues. Ministry of Agriculture and Food Security (MASA) responsible for the establishment, management Another challenge to the sustainable management and administration of forests planted for commercial of resources is the low levels of land rights’ and energy purposes. MITADER is responsible for registration. The land administration agency’s managing forest resources for energy purposes, capacity to issue land licenses and monitor their although the country’s energy development policies use—and to register land occupancy—is low, a and strategies are placed under the Ministry of problem that is partly due to insufficient resources, Mineral Resources and Energy (MIREME). both human and financial. 19 Community delimitation has been delivered through Intersectoral collaboration and coordination can be financing provided by bilateral donors, but with greatly improved. Even as the landscape approach is elevated costs and limited impact (so far, a total of gaining importance, there is much room for coordination 950 communities have been delimited, and about amongst sectors at the policy level and in terms of 500,000 licenses or DUAT recorded). The lack of, initiatives on the ground. An example is the case of or inadequate, decentralized registration services at forest law enforcement, where coordination among the district level, with poor or no coordination between forest administration, law enforcement agency, police relevant actors, has inhibited efforts to systematically and customs is paramount, yet this collaboration is not execute the cadastre (property registry) and register effective. Another important example of collaboration land rights. Few land administration and management needed is between MITADER and the Ministry of services in municipalities and rural areas provide Transport on the integration of spatial forest data into the effective administrative responses or are accessible to national database managed by the Ministry of Transport. most citizens. Acquiring a DUAT is lengthy and costly, Or the coordination between agriculture and forestry and can involve many steps over several years. activities, as commercial agriculture development has There is little direct communication, formal integration, the potential to significantly reduce forest cover. or harmonization of systems and procedures. The absence of a common methodology has led to mixed results of previous efforts, an ineffective control of the Opportunities process of occupation, and the distribution of land resources by public institutions. This has contributed The current government has created an to an increased level of land-related conflicts and institutional set up that places a strong emphasis the expansion of the informal land market, which is on reducing rural poverty and sustainable particularly dynamic in growing urban centers.44 management of natural resources. MITADER was established with a broad mandate over land, forests, The benefits that communities can gain from forests rural development, climate change, environment and are limited and made worse by the lack of the full conservation, facilitating cross-sectoral coordination. recognition of their rights to natural resources. The It set up the National Sustainable Development law mandates that communities residing within licensed Fund (FNDS) to mobilize and manage domestic and timber areas receive 20% of the logging taxes paid to international financing, including climate finance, the government by operators. About 50% of the value and to foster activities on rural development and of fines collected from forest law enforcement should sustainable natural resource management (Box 7). also be shared with stakeholders who participate in the FNDS has provincial units, currently in Nampula, enforcement effort and issuance of fines. Zambezia, and Cabo Delgado. MITADER adopted the National Sustainable Development Program, aimed at However, communities receive little or no benefit improving the livelihoods of rural populations and the either because of unlicensed wood harvesting, or management of natural resources through promoting the cumbersome process and weak enforcement small and medium enterprises in rural areas, and of the benefit sharing mechanism. There are 1,089 in value chains linked to agriculture, forestry, and communities that receive a portion of the 20% of taxes tourism. Forests are recognized as an instrument for collected from forest licenses.45 Even when their rights poverty reduction under this Program. are conveyed, the local communities concerned often do not have enough capacity to govern, manage, and The government’s high-level priorities and the develop their resources. Unfortunately, the general targets it has expressed in its Five-Year Plan perception of benefits from resources is the sharing of (PQG 2015—19) recognize the importance of rural revenues, rather than creating economic benefits and development and forests. Priority V emphasizes the well-being through active engagement in management. sustainable and transparent management of natural Communities also have limited negotiating power with resources and the environment, which includes third parties. improving land-use planning and strengthening the implementation of these land-use plans. Land The participation of local communities and tenure security is described in PQG 2015–19 as community-based organizations in decisions related key to promoting the rights of local communities to resource management is weak, leading to their and their livelihoods and a more business-enabling limited influence in resource management. This is environment in Mozambique. due to a combination of institutional weaknesses, low capacity for expertise and technology, and the lack of partnerships and finance.46 44  Mozambique Land Administration Project (Terra Segura), World Bank Project Appraisal Document (2017) 45  DINAF annual report (2015) 46  Community Based Natural Resource Management: Reformulating and strengthening current approaches in Mozambique, World Bank policy brief (2016). 20 approved the National REDD+ Strategy, which aims to Box 7: FNDS and Technical Assistance reduce deforestation by 40% and to restore 1 million through the Multi-Donor Trust Fund (MDTF) ha of forests by 2030, equivalent to annual emission for Integrated Forest and Landscape reductions of 170MtCO2. Management The creation of a National Forest Monitoring System The Bank has supported the institutional capacity was concluded in 2018, capable of monitoring forest building of FNDS through the following areas: cover and measuring, reporting and verifying (MRV) emission reductions annually. This included the 1) Leadership and Project Management submission of the Forest Reference Emissions Level Coaching. ML Consultoria provided strategic (FREL) to the UNFCCC. The FREL is the baseline guidance to FNDS on institutional organization against which to assess Mozambique’s performance arrangements and developed management in climate change mitigation through forests as well systems for the institution. as the impact of policies and measures taken by the Government to achieve NDC goals. 2) Social and Environmental Risk Management. FNDS’s social and environmental safeguards Mozambique is currently developing a capacity has been strengthened. FNDS developed methodology to calculate emissions from forest a common safeguards framework and tools for degradation. The government is due to sign an all their projects, to ensure efficiency and quality Emission Reductions Purchase Agreement in 2018 control, including a Grievance Redress Mechanism with the FCPF Carbon Fund, a commitment to paying (GRM). up to US$50 million for demonstrable and verifiable emission reductions within the Zambezia Integrated 3) South–South collaboration and knowledge Landscape Management Program. exchange. South–South cooperation activities aim to strengthen the capacity of FNDS and partner Having recognized systematic community land institutions through the exchange of experience delimitation as part of a wider strategy to promote and knowledge with other countries concerning sustainable rural development, the government integrated landscape and forest management. has been clarifying land rights. The government’s Terra Segura program aims to register five million individual parcels of land and delimit four thousand The current government has also publicly communities. The World Bank is supporting this goal recognized forest-related challenges and shown through the MozFIP and Sustenta projects, as well commitment to addressing them. MITADER has as through the MozLand project. The delimitation been implementing forestry sector reform since 2015 process comes as a packet of interventions, often to address challenges in the forestry sector, including involving the participatory preparation of local land institutional changes and a review of the national use plans, Community Development Action Plans forest policy and legal framework (Box 8). The World (CDAPs),47 the creation of a Natural Resources Bank has closely followed and supported these Management Committee, as well as capacity building reforms and engaged in policy dialogue, including activities for the community. just-in-time technical advice on these measures. The momentum built around the forest sector reforms The legal registration of land use rights is a first step led the Bank to increase its support to the sector. As towards the protection of communities and individual the largest investment in the forest sector, MozFIP land rights and is seen as a fundamental criterion for is providing the financing needed to implement the engaging in Community-Based Natural Resources reforms. Management (CBNRM) initiatives, particularly if there is a trajectory towards attracting investors. The government has also set goals for carbon emission reductions. Mozambique submitted There are ways forward to increase the benefits its Nationally Determined Contribution (NDC) to to communities from forests, beginning with key the UNFCCC in 2016. The NDC targets for total stakeholders recognizing that CBNRM is a key reductions are 23MtCO2 from 2020 to 2024 and 53.4 element of a national rural development strategy. MtCO2 from 2025 to 2030. The recently concluded 5th National Conference on The NDC is being updated in 2018, with the National Community-Based Natural Resources Management, Climate Change Adaptation and Mitigation Strategy financed by the Bank, initiated a national strategy and guiding NDC implementation. In 2015, MITADER Action Plan for advancing CBNRM in the country. 47  Also known as Agenda Comunitárias, these action plans express the aspirations of communities (including different social groups) about their development in a predefined period and prioritize the various initiatives the communities believe are possible within their delimited area. This provides the basis on which 21 Box 8: Forest Sector Reforms under MITADER • Revision of the national forest policy, strategy, • Creation of FundInvest (2017, published in BR and law (ongoing) 172 III Serie), an entity affiliated with the State to facilitate the export of processed timber • Two-year suspension on new licenses and concessions (Decreto 40/2015) • Minimum standards for sustainable management (2018), to be translated into a • Nation-wide audit of licensed areas (forest legal instrument for evaluation of operators’ concessions and simple licenses) (2015) performance to inform any suspension of licenses, with potential for a national certification • Moratoria on exploration of pau ferro for five standard to be developed. years (DM 10/2016) • Update of the National Forestry Inventory • New law on timber exports, including log (2017), which was critical input to the definition export ban on all native species (Law 14/2016) of the AAC for 2017. The NFI should be used to inform the allocation of forest licenses and • Operação Tronco (2016), an intelligence and potential moratoria on certain species. enforcement operation that led to massive timber seizures (reported 150,000m3 and estimated • Establishment of the Unit for Monitoring, fines of more than US$1.4 million) that was a Measurement, Reporting and Verification of signal of government action to confront illegal REDD + Activities (2016). logging. • REDD+ Decree approved (2018) • Transfer of forest law enforcement mandate to the newly-created National Agency for • Update of the National Forest Program (2018) Environmental Control (AQUA) and the National Enforcement Service (Serviço Nacional de • Exploration ban on nkula, pau ferro, and Fiscalização) (ongoing) mondzo, export ban on chanfuta, umbila and jambire (Despacho 29/3/18) • New export regulation of processed wood (Decree 42/2017, following Law 14/2016), • Revitalization of the National Forum on Forests to ensure better control of the timber export (2018) business and promote greater added value to timber • MoU signed with China on sustainable forest management (2018) Recommendations moving forward should include the National Land Use Plan, which is a strategic and creating a national program dedicated to CBNRM that programmatic instrument that provides a mid- to long- could institutionalize long-term capacity building for term organizational vision for territorial planning and communities and pursue long-term partnerships for use, articulated with a socio-economic development communities to harness the market potential for forest model and strategy and which provides information, and agriculture products. To do this, the government data, and scenarios for the evaluation of the country´s should endorse a coherent package of interventions natural resources and infrastructure. Comprehensive with well-tested tools and approaches that can spatial planning at the national level will orient land be replicated and scaled up in CBNRM initiatives use decisions and provide a long-term development nationwide. scenario. The MozDGM project (see Box 9) will serve as a The strategic planning at this level will first vehicle of financing through which the Action Plan and involve a diagnosis of the national territory, its such a national program can be implemented. natural and physical elements, climate change and human impacts (population growth and The government has recognized the need for effects on land use and land degradation), spatial planning and is developing land use and the identification of strategic options for plans at the national and local levels. Of note is spatial development. A dynamic modeling platform a community negotiates its interests or intentions/plans with different actors (such as NGOs and investors). 22 Box 9: Actors in the Landscape—Civil Society Civil society organizations have the essential responsibility of holding the government accountable. NGOs are also the main implementers of CBNRM projects that involve working with communities. There are few civil society organizations in Mozambique with significant direct experience in forest management and governance. The majority of these organizations are focused Structure of the Zambezia Integrated Landscape Management Forum on community development aspects, such as on community organization and planning, and promoting In Zambezia, the platform led to the creation of a activities for livelihoods and income generation—but civil society working group that signed an MoU with which are often related to resource management. Portucel to provide advisory services on social and They are key institutions for the continued environmental issues. strengthening of community capacity for CBNRM. The Bank has close partnerships with many of them, The Mozambique Dedicated Grant Mechanism for such as the World Wildlife Fund for Nature (WWF) Local Communities Project (MozDGM) is a project Mozambique, Iniciativa para Terras Comunitárias within the ILM portfolio managed directly by and for (iTC), Micaia Foundation, Radeza, and ORAM. communities, community-based organizations and civil society organizations. Led by WWF Mozambique The Multi-Stakeholder Landscape Forums and a National Steering Committee, and comprised of in Zambezia, Cabo Delgado, and Nampula are civil society members, MozDGM is an unprecedented important spaces for dialogue and landscape- opportunity focused on strengthening the capacity level decision-making among a diverse set of and participation of communities in natural resource stakeholders, with a large role for civil society. The management that can influence a national approach forums have structured thematic working groups to to capacity building. discuss technical issues of priority in the landscape. simulating future trajectories of land use and land At the community level, the Government of use change, including future levels of degradation Mozambique is also promoting and financing and land use demand by population growth, is a the preparation of local land use plans through component of the National Land Use Plan. The participatory, community-led processes. A clear planning process will also allow an evaluation of definition of land use opportunities is an important interventions for sustainable management of land foundation upon which communities can be and natural resources, providing the government with empowered and informed to sustainably manage their information to make policy decisions. resources and pursue economic opportunities. At provincial and district levels, the government is developing spatial plans such as the recently Box 10: Actors in the Landscape—Academia launched Special Land Use Plan for the Costa dos The forest sector counts on the support of local Elefantes area, which covers part of the Matutuine universities as well as national and regional District and Inhaca Island. This Special Land Use research agencies. Universities that partner on Plan and its corresponding district urban plan will Bank projects include Universidade de Eduardo contribute to the sustainable and resilient long-term Mondlane, UniZambezi in Zambezia, and UniLurio development of one the fastest growing areas of the in Cabo Delgado. country, where there are major urban infrastructure developments but also rich biodiversity areas—the Instituto de Investigação Agrária de Moçambique Maputo Special Reserve and Ponta do Ouro Partial (IIAM) is the main research institution on Marine Reserve—with a potential for high-end agroforestry. The role of academia could be ecotourism development. This plan will allow greater expanded to provide applied technical assistance protection of the mangroves on the Maputo Bay and and capacity building to other actors in the sector. the Licuati Forest Reserve, among the few remnants of coastal sand forests in the whole southern Africa. 23 World Bank Engagement: Sustainable Rural Development through Integrated Landscape Management To secure the contribution of forests to institutional management and of implementation on the sustainable rural development, an integrated ground, so as to combine investments in a geographic landscape management approach is critical. area (landscape) to maximize their impact. The threats to forests come from multiple sources and sectors, primarily outside of the forest sector, The central focus of engagement with the involving multiple actors through competing demands Government of Mozambique (GoM) is sustainable on the land and resources. As such, an integrated rural development, which captures the programmatic landscape approach is required, with interventions approach well and is an important topic for the within and beyond the forest sector engaging multiple country’s national agenda. In this way, the Bank’s stakeholders at various levels. This approach is key to support is integrated with the government’s strategic sustainable rural development in Mozambique. priorities and investments are mainstreamed into its programs in line with approaches advocated in the Forest A sustainable landscape will simultaneously meet local Action Plan. The portfolio can be organized into four main needs (for example, water availability for households) areas: investments, analytical work, technical assistance, while contributing to Mozambique’s national and performance-based payments. Detailed information commitments and international targets, such as can be found in Annex 1. protecting biodiversity and reducing GHG emissions. The GoM and Bank have established a high-level The World Bank’s Environment and Natural partnership to promote rural development and the Resources Management engagement in sustainable management of natural resources. Mozambique, through the Integrated Landscape The Bank’s Integrated Landscape Management Management portfolio, adopts a programmatic portfolio, in support of the government’s sustainable landscape approach and promotes forest-smart development agenda, provides a platform for drawing investments. The integrated landscape approach together a diverse range of financing sources and recognizes the link between agricultural development continues to grow. Figure 18 demonstrates the and natural resource management, both in terms of evolution of the Bank’s engagement and illustrates the blending of several sources of financing, including a robust International Development Association (IDA) allocation, along with trust funds, most of which relate to climate finance (such as the Climate Investment Funds, Forest Carbon Partnership Facility and Global Environment Fund). The GoM has asked the Bank to lead the coordination of Development Partners around natural resources management. Key partners have affirmed and supported this role through the establishment of the Multi-Donor Trust Fund for Integrated Landscape and Forest Management, with contributions from Sweden and potential contributions from other partners. Knowledge exchange and stakeholder engagement a core part of the Bank’s Integrated Landscape Management approach. Left: A community member takes a break in Zambézia Province, central Mozambique 24 Figure 18: Evolution of financing and sources in the Bank’s support to the GoM on integrated landscape and forest management Galvanizing support from partners and other rural financing mechanisms (with Brazil, Mexico, stakeholders, the Bank has been able to rally strong South Africa and Namibia), and signed a tripartite backing for the government’s bold efforts to deal with agreement with Mozambique and Brazil to further politically sensitive issues, such as combating illegal promote programmatic exchanges on rural logging. development and natural resource matters. Such partnerships with local, regional, and global networks To grow development partnerships and support should continue to be expanded to maximize for Mozambique’s vision, the Bank is actively learning and the sharing of experiences to enrich promoting South–South knowledge exchange on Mozambique’s own programs. Box 11: Emission Reduction Payments under to those who contributed to generating the results in the Zambezia Integrated Landscape Program accordance with the stakeholder-approved Benefit Sharing Plan. (ZILMP) The plan will allocate 70% to communities, 20% to An Emission Reductions Purchase Agreement the private sector, 2% to the provincial government, (ERPA) will be signed between the government and 4% to the district government and 4% to Gilé the FCPF Carbon Fund in 2018 for payments of up National Reserve, to be reinvested in sustainable to US$50 million for verifiable emission reductions management practices and actions that will sustain made within the nine districts of the ZILMP. If emission reductions in the long term. emissions are reduced, payments will be triggered 25 There are expanding opportunities for climate finance, the commitment from the FCPF Carbon Box 12: Maximizing Finance for Development Fund for performance-based payments in (leveraging private sector finance) with ILM the Zambezia province being the first vote of support confidence of demonstrable results in emission reductions (Box 11). • Strengthening commercial resource mobilization for agriculture and forestry Mozambique is actively seeking opportunities value chains: A matching grants scheme under the Green Climate Fund, a key resource under the US$80 million (IDA) Sustenta project identified early in the Investment Plan. provides financing to “emerging commercial Mozambique is also one of the few countries that has smallholders.” It enabled Mozambique’s implemented a climate change Development Policy National Investment Bank to establish Operation which achieved progress on key policy a concessional credit line to co-finance initiatives. This partnership leverages financing from smallholders in climate-smart agriculture and the private sector, including from the IFC. Private forestry. actors are becoming a growing source of financing, increasing their investment in sustainable resource • Leveraging private equity and technical management through partnerships, both with the expertise to enable PPP in protected areas public sector and with communities (Box 12). management. Renowned multinational operators have engaged the GoM on PPP for Protected Areas management, in the Bazaruto Archipelago Park, and the Maputo Special Reserve. They have brought over US$20 million from private resources and technical expertise (including on nature-based tourism), supported by the US$46 million MozBio project. • Promoting community-private partnerships for natural forest management and plantation. Through the FCPF, cashew farmers are benefiting from a cashew market information service that provides prices and market evaluations, helping them make informed business decisions. MozFIP (US$47 million) is supporting communities such as Uapé and Nipiode to create community forest concessions in partnership with forest companies to have access to market and timber processing technology and expertise. MozFIP also established a performance-based commercial plantation scheme to incentivize smallholders to engage in commercial forestry and facilitated market access and technical support from IFC-owned Portucel. Left: Representatives from the Bank, GoM and stakeholders in Bazaruto Archipelago Park. 26 Recommendations and Conclusion Policy Recommendations The World Bank has been working closely with • Increase transparency and access to data the Government of Mozambique to pursue priority on the forest supply chain, including data on policy actions in certain key areas, some of which concessions, as well as on timber allocation, are highlighted below. Many of these are already licensing, transport, processing and export, supported through the World Bank’s operations, but through timber tracking technology. Develop there is room for expansion and additional support a Forest Information System using the best from development partners. There are also many available technology and improve tools for opportunities to support forest-smart and climate- monitoring deforestation and land use cover smart activities through mainstreaming these change principles into other sectoral interventions. • Build and invest in institutional capacity 1. Natural forest management and forest to improve resource allocation planning, governance concession management, and the application of forest management regulations by forest • Re-envision the concept of sustainable forest concessionaires at all levels management—change the idea of forests as a source of timber only to an idea that includes • Provide incentives and technical assistance their non-economic and non-market uses in to the private sector for the adoption of order to capture the full value of the forests, sustainable forest management practices and particularly for local communities to add value to timber products • Promote the multiple uses of forests and • Develop new, better-paying markets for forest values that can be added to them, including products, including the promotion of certification the sustainable use of wildlife (trophy hunting, for access to new markets, and research and game farming), non-timber forest products, and development on new forest products ecosystem services to maximize their value • Enhance law enforcement with appropriate • Reform the framework of forest concessions technology and tools that allow real-time to ensure the existence of only financially alerts, improve the law enforcement agency’s and environmentally sustainable enterprises. protocols for compliance control, develop This would require a significant reduction in a system for complaints and investigation the number of operating concessions and the of forest crimes, and improve collaboration elimination of simple licenses as they are difficult amongst relevant institutions, such as to control and easily manipulated for illegal customs and the police. Improve or introduce use. Forest concessions should be allocated regional agreements for cross-border control, based on sustainable yields and future stock and train judiciary agents in the judgment and prosecution of forest crimes • Conduct the long-term planning and allocation of forest resources for different uses, such as • Promote meaningful multi-stakeholder for commercial use and conservation, including participation on decision-making through the establishment of permanent forest areas to consultation platforms at all levels maintain a permanent productive forest heritage 27 2. Biomass energy - Charcoal 6. Secure land tenure security • Increase the sustainability and efficiency of • Secure the allocation of individual and com- charcoal production (such as with more efficient munity land rights (community land certifi- kilns, and through better use of existing kilns) cates and DUATs) • Reduce dependency on wood energy by • Systematize the formalization and official promoting alternative biomass and non-biomass registration of land titles sources—establish wood fuel plantations for charcoal production, accelerate and incentivize 7. Community-Based Natural Resources the adoption of alternative options for fuel in Management urban areas, such as gas, solar, and mini-hydro • Establish a national CBNRM Program that • Reduce the use of natural forests for systematizes long-term capacity building charcoal production, and promote improved, for local communities, access to finance more efficient stoves to reduce pressure on to develop local business, and support on wood fuel sources natural resources management (particularly forests and wildlife) 3. Agriculture • Promote partnerships between communities • Promote climate-smart and conservation and the private sector for the development of agriculture, including agroforestry systems, community businesses, and develop models to encourage small farmers to invest in for the necessary support and benefit- stable agricultural systems and move away sharing structures for such partnerships from shifting agriculture Resource Mobilization • Support value-added activities in more productive and better spatially planned value To realize Mozambique’s ambitious landscape chains that integrate sustainable practices management approach fully, good practices and engage rural households and demonstrated local successes need to be scaled up and replicated across other districts • Restore degraded lands to become and provinces. To achieve this transformation, productive areas again additional finance needs to be leveraged. Mozambique’s Forest Investment Plan (2015) 4. Plantation forestry lays out a large-scale, phased framework and the direction for expanding investments outside and • Create incentives for the promotion of within the sector that will advance and scale up the commercial forest plantations, particularly landscape approach. The Investment Plan considers for small-scale producers using out-grower the existing allocation from the Forest Investment schemes with private companies Program and other World Bank operations as the initial phase of the framework. Subsequent phases • Improve the enabling environment for of financial support will expand FIP approaches and company–community–government relations sector-related activities to other landscapes, as well and facilitate community consultations, as deepen and sustain existing activities and policy particularly on access to land reforms. 5. Land use planning The Investment Plan, coupled with the Bank’s convening and technical support, led to the • Develop spatial land use plans at the national creation of the Multi-Donor Trust Fund for and local levels aligned across their scales Integrated Forest and Landscape Management, and based on future land use scenarios, such which has the potential to attract other as degradation and urbanization development partners. While significant resources have already been dedicated to the Investment • Support land use and resource planning Plan, to implement it across the entire country would at the community level and integrate require additional resources of well over US$500 Community Development Action Plans into million. district plans to improve local governance The phased approach is designed to demonstrate • Ensure compliance with land use regulations the strength of the institutional and implementation 28 structures to deliver concrete results in the sector, Conclusion which would facilitate the leveraging of additional finance from other international instruments and Forests in Mozambique have the potential to donors. generate benefits to local communities through employment, revenue (timber, non-timber forest The Government of Mozambique is strengthening products, wildlife) and ecosystem services, to its capacity to attract, manage, and efficiently the national economy through taxes on forest utilize additional funds, particularly with the products (particularly timber), and to the global establishment and continued strengthening of community through environmental services, the National Sustainable Development Fund particularly carbon storage and biodiversity (FNDS) (Box 7). A full range of financing sources protection. Realizing this potential will take a bold should be pursued, beyond climate finance, to include medium- to long-term program of reforms, backed private sector financing through partnerships with up by investments. communities for sustainable enterprises (Box 12) and other innovative approaches. Such reforms will require continued political will and significant financing from different sources, including The effective disbursement of funds, particularly domestic sources (national government and the at the local level, is a capacity that is being private sector), markets (timber, tourism), and from developed, demonstrated, and improved through the international community (climate finance, payment the current portfolio of investment projects. for environmental services such as REDD+, and Financing mechanisms, such as matching grant development aid). Continued resource mobilization schemes and benefit sharing mechanisms for from multiple sources is needed to ensure that these disbursing benefits to local communities, are for efforts can be sustained. example being tested. The Benefit Sharing Plan developed under the Emission Reductions Payments Below: A woman (and baby) collects water near a village in Cabo Delgado Project in Zambezia is one such model (Box 11). Provice, northern Mozambique. 29 Annex 1: World Bank Engagement The Bank’s engagement can be organized in four main areas: investments, analytical Performance-Based work, technical assistance and performance-based payments. Payments Investments Technical Assistance Analytical Work Annex 2: Priority Landscapes in Mozambique Cabo Delgado Landscape home to 135,000 people, as well as Total Area: 4 million ha a rich array of terrestrial and marine fauna and flora such as elephants, Population: 611,538 turtles and miombo forests. Working Rural Population: 78.4% with civil society and community-based Total Forest Area: 1,756 ha organizations, the ILFM Portfolio is helping communities that depend on Deforestation Rate: 0.32% potentially destructive practices, such as The Cabo Delgado Landscape hosts slash-and-burn agriculture and charcoal a variety of key terrestrial and marine exploration, find alternative income- biodiversity habitats, each with different generating activities that decrease geographic features. The area includes deforestation and forest degradation. the Quirimbas National Park, which is Nampula Landscape Due to its fertile soils, high altitude Total Area: 3 million ha and multiple river heads, the Nampula Landscape has great agriculture and Population: 926,621 forestry potential. Since many rural Rural Population: 79% households still use traditional and often Poverty: 49% below the poverty line inefficient agriculture practices, the ILFM Portfolio is helping to direct substantial Total Forest Area: 797,000 ha private investments into sustainable agriculture and forest-based value chains. Zambezia Landscape several biodiversity hotspots. The ILFM portfolio is helping to mitigate Total Area: 6 million ha key threats to the landscape by Total Population: 2,286,988 strengthening natural and planted forest Rural Population: 74% management, increasing land tenure security, enhancing the sustainability and Poverty Level: 56% below poverty line productivity of agriculture and biomass Forest Area: 3,225 ha energy, and improving spatial planning. This landscape has been chosen as Deforestation rate: 0.62% an Emissions Reduction Program Area The Zambezia Landscape hosts forests under the Forest Carbon Partnership and woodlands, agricultural lands and Facility’s Carbon Fund. the Gilé National Reserve, protecting