UNITED REPUBLIC OF TANZANIA MINISTRY OF NATURAL RESOURCES AND TOURISM TANZANIA FOREST SERVICES AGENCY

Transcription

1 UNITED REPUBLIC OF TANZANIA MINISTRY OF NATURAL RESOURCES AND TOURISM TANZANIA FOREST SERVICES AGENCY BUSINESS PLAN AND ASSOCIATED BUDGET FOR FINANCIAL YEAR 2015/2016 July, 2015

2 EXECUTIVE SUMMARY This Business Plan (PB) for the financial year 2015/16 is the second for implementing the five year Strategic Plan (SP II) of 2014/19 timeframe. The BP has benefited from the first Strategic Plan (SP I 2011/14) implementation, lessons learnt and adaptive management. For the first time this BP takes cognizance of the climate change impacts by mainstreaming adaptation and considering mitigation measures. The Business Plan is built on the five objectives stipulated in the SP II; 27 key performance targets and 72 corresponding activities that have been formulated based on identified priorities and main interventions to include: boundary consolidation; forest protection; tree planting (afforestation/ reforestation); beekeeping development; expanding planted areas under forest plantation and intensifying silvicultural operations. Building institution capacity for both physical infrastructure and human resources remains the primary focus of the Agency success. This BP is projecting to generate revenues of about TZS billion to be collected during the fiscal year. This projected amount is comprised of TZS billion to be collected as forest royalties and other charges; billion to be retained at source as LMDA in forest plantations; and TZS 1.83 billion as three percent of royalties and two percent of fees for TaFF. Furthermore, TZS 1.00 billion and 4.60 billion will be collected as 5% of royalties for Cess and 18% as VAT respectively. A total budget of about TZS 55.2 billion is estimated to implement the 72 planned activities. This budget will cover direct field costs of about TZS 31 billion, which is equivalent to 56% of the total budget. Administrative and operational costs are estimated to be TZS 15.8 billion (29%) and TZS 8.4 billion (15%) respectively. Operational expenses includes those set to cater for human resources development; performance management system; office working facilities; and meeting international obligations among others. Further administrative costs are meant to meet institutional and staff statutory. In addition, funding of ongoing contracted projects/programmes by Development Partners, Bilateral and Multilateral Agencies will constitute to financing of conservation activities in key biodiversity areas that have global importance. The Agency will remit estimated revenue of about TZS 25.0 billion as part of its obligation to Treasury through the Ministry revenue collection. The implementation of the TFS functions is gaining momentum that requires transformational changes from the Business As Usual attitude to a more proactive engagement and adaptive management. The Agency will operationalize the new Scheme of Service and Salary Structure once approved to ensure it remains competitive and have ability to motivate staff, attract and retain key talents. Partnerships will be enhanced with key stakeholders ranging from government institutions, district councils, research and training institutions, ii Bussiness Plan for Financial Year

3 EXECUTIVE SUMMARY communities, NGOs, and the private sector to provide the necessary synergies. Monitoring and evaluation of implementation will serve to create an efficient and integrated follow-up, reporting system and service delivery. This will adhere to monitoring standards to build effective information management mechanisms. Outstanding risks include untimely approval of TFS Scheme of Service to motivate staff; employment permits not granted on time to curb the staff deficit and inefficient procurement system. Bussiness Plan for Financial Year iii

4 ABBREVIATIONS AND ACRONYMS BP CBD CE CSO CZ DBSS DFM DfNS DPRU DPs DRM EAMCEF EPWAS EU Euro EZ FIP FNRs FORLIS FRs FY GCF GDP GEF GHG GN HADO HASHI HIMA HIV/AIDS HQ IGA Business Plan Convention on Biological Diversity Chief Executive Civil Society Organization Central Zone Director of Business Support Services District Forest Manager Debt for Nature Swaps Director of Planning and Resource Utilization Development Partners Director of Resources Management Eastern Arc Mountains Conservation Endowment Fund Equitable Payments for Water Services European Union The official currency of the most European Union s member states Eastern Zone Forest Investment Program Forest Nature Reserves Forestry Registration and Licensing System Forest Reserves Financial Year Global Climate Fund Gross Domestic Product Global Environment Facility Green House Gases Government Notice Hifadhi Ardhi Dodoma Hifadhi Ardhi Shinyanga Hifadhi Mazingira Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome Headquarters Income Generation Activity iv Bussiness Plan for Financial Year

5 ABBREVIATIONS AND ACRONYMS IPCC JFM Km KPI LG LMDA LZ M&E m 3 MAB MAI MDAs MDGs METT MNRT MoU MPM NAFORMA NAFRAC NAMAs NAPA NCCS NCD NCMC NFCC NGOs NHC NRs NWFPs NZ OPRAS PES PFM PMO-RALG PPP PS PSRP REA Intergovernmental Panel on Climate Change Joint Forest Management Kilometre Key Performance Indicator Local Government Logging and Miscellaneous Deposit Account Lake Zone Monitoring and Evaluation Cubic meters Ministerial Advisory Board Mean Annual wood Increment Ministries, Independent Departments and Agencies Millennium Development Goals Management Effectiveness Tracking Tool Ministry of Natural Resources and Tourism Memorandum of Understanding Mufindi Paper Mill National Forest Resources Monitoring and Assessment National Forest Resource Management and Agroforestry Centre National Appropriate Mitigation Actions National Adaptation Plan Action National Climate Change Strategy Non Communicable Disease National Carbon Monitoring Centre Norwegian Forest and Climate Change Non-Government Organization National Housing Cooperation Nature Reserves Non Wood Forest Products Northern Zone Open Performance Review and Appraisal System Payment for Ecosystem Services Participatory Forest management Prime Minister s Office, Regional Administration and Local Governments Public Private Partnership Permanent Secretary Public Service Reform Programme Rural Energy Agency Bussiness Plan for Financial Year v

6 ABBREVIATIONS AND ACRONYMS REDD RNE SFM SHZ SIDA SP SULEDO SZ TaFF TBA TEMESA TFS TRA TZS UN UNCCD UNDP UNFCCC UNFF URT USD VAT WAP WZ ZM Reducing Emissions from Deforestation and forest Degradation Royal Norwegian Embassy Sustainable Forest Management Southern Highland Zone Swedish International Development Cooperation Agency Strategic Plan Sunya Lengatei and Dongo Southern Zone Tanzania Forest Fund Tanzania Building Agency Tanzania Electrical and Mechanical Services Agency Tanzania Forest Services Agency Tanzania Revenue Authority Tanzania Shillings United Nations United Nation Convention to Combat Desertification United Nations Development Programme United Nations Framework Convention on Climate Change United Nations Forum on Forests United Republic of Tanzania United States Dollar Value Added Tax Wood Fuel Action Plan Western Zone Zonal Manager vi Bussiness Plan for Financial Year

7 CONTENT Executive Summary...II Abbreviations And Acronyms... IV Contents... VII List Of Tables... VII List Of Figures... VII List Of Appendices... VII 1.0 INTRODUCTION STRATEGIC MANAGEMENT AND ADMINISTRATION Vision, Mission, Core Values and Objectives Human Resources Procurement and Core Assets Procurement System Core Assets Administration MAIN STAKEHOLDERS AND THEIR EXPECTATIONS BUSINESS ENVIRONMENT AND ITS IMPLICATIONS Key Challenges Climate change Policy and Legal Framework Socio - Economic, Energy and Environment Technological advancement Institutional capacity and framework Staffi ng and recruitment Opportunities for Success Climate Change Policy and Legal framework Socio - Economic, Energy and Environment Technological Environment Institutional Capacity PROFILES OF REVENUES Sources of Revenue Revenue Projections Factors Considered in Revenue projection...17 Bussiness Plan for Financial Year vii

8 CONTENT 6.0 PLANNING AND BUDGET ESTIMATES Planning, Budgeting and Approval Process Priority Strategic Interventions Institutional capacity development Conservation and management of forest & bee resource base Forest and bee Resource Utilization Cross cutting areas Resources Allocation for Each Objective and Target Description of Planned Targets and Activities Objective A: HIV/AIDS infections reduced and supportive services to staff living.. with HIV/AIDS improved Objective B: Good governance and Gender balance enhanced Objective C: Institutional capacity to deliver services strengthened Objective D: Forest and bee resource base and ecosystem improved Objective E: Utilization of Quality forest and bee products enhanced Conservation Support from Partners PERFOMANCE ASSESSMENT Monitoring Mid-year Review Risks and Assumptions Risks and Mitigation Assumptions Reporting Internal Reporting Plan External Reporting Plan...36 LIST OF TABLES Table 01: Forest Land Ownership...1 Table 02: Current Human Resources of the Agency...4 Table 03: List of TFS Forest plantations...6 Table 04: List of Stakeholders and their Expectations...7 Table 05: Types of Forest Products and Services, their Sources and Markets...14 Table 06: Trend of Revenue Collection...15 Table 07: Summary of Revenue Projections for FY 2015/16 by Item...15 Table 08: Revenue Projections for TFS stations 2015/ Table 09: Number of Activities and respective Targets and Resources allocation...21 Table 10: Summary of Budget Estimates and Percentage for Stations per Objectives...22 Table 11: Summary of Plantation Budget Estimates Derived from LMDA...23 Table 12: Summary of Projects with Financial support from Partners...33 viii Bussiness Plan for Financial Year

9 CONTENT LIST OF FIGURES Figure 01: Revenue Projections by Items for TFS Stations 2015/ Figure 02: Percentage Budget Share for Main Stations...22 LIST OF APPENDICES Appendix I: Details of TFS Human Resources...37 Appendix II: TFS major Assets and Heavy Plants...38 Appendix III: Districts with Forest Managers...40 Appendix IV: Revenue Collection Trend for the year 2012/ /15 and Projection for the year 2015/ Appendix V: Detailed Revenue Projections by Items for Each Station...42 Appendix VI: Budget and Details of Activities...43 Bussiness Plan for Financial Year ix

10 1.0 INTRODUCTION Forest resources are estimated to cover 48.1 million ha (55%) of total surface land area of Tanzania Mainland (88.6 million ha). Table 01 shows areas and percentage of forests by land ownership. Table 01: Forest Land Ownership Land Ownership Area (Million Ha) Percentage Central Government (Forest and Wildlife reserves) Local Government Village Government Private forest lands General Lands under TFS Others Total Source: TFS 2013 The central government is responsible for the management of national forest reserves (natural and plantations), bee reserves and forest and bee resources on general lands amounting about mill ha (40%), out of which mill ha is estimated to be under TFS ownership. The remaining 60% is under the management of PMO-RALG (52%) and the private sector (7%) and other unknown ownerships (1%). Vast area of the unreserved forests and woodlands are found in village lands where there is unsustainable management of the resources. TFS mandate to manage and own the national forest and bee resources is given under the Executive Agencies Act, Cap. 245 R.E through the Establishment Order published in the Government Notice No. 269 dated 30 th July, This legal instrument which establishes semi-autonomous government agencies requires TFS to oversee the management of national forest and bee resources in an efficient and effective manner; promote the potential for the continuous improvement of services and improve the quality and value for money on the delivery of public services. Among other responsibilities of TFS that enhance this mandate are to provide forestry and beekeeping extension services, enforcing forest and beekeeping legislation, revenue collection, quality assurance and rehabilitation of degraded lands. In doing so, TFS will continuously contribute to the social, economic, ecological and cultural needs of present and future generations. TFS has therefore the challenging responsibility of bringing about improvements in conservation of natural forests, bee resources and forest plantations. Over the past three financial years (2011/ / 2014) of the implementation of TFS Strategic Plan I (SP1), major outstanding achievements attained include: countrywide National Forest Resources Monitoring and Assessments (NAFORMA) that came up with accurate and reliable information on the state, extent and uses of the forest resources that are useful for decision making and development of relevant policies and programmes to achieve sustainable forest management; revenue accrued amounted TZS 199,771,416,440 1 Preliminary field reports indicate forest reserves under TFS have total area of million ha. NAFORMA results indicate area for Central Government reserves is million ha. Hence the difference is assumed to be forest land under wildlife reserves which need field verification. 1 Bussiness Plan for Financial Year

11 equivalent to 101% of the targeted goal. This has enabled TFS to operationalize its plans to meet the desirable goals; increase in new forest plantation areas by 9,947 ha from 83,659 ha to 91, 606 ha ensures sustainability in management of forest and bee resources and supply of wood product; replanting 14,200 ha of forest plantation areas; consolidation of forest boundaries of 102 forest reserves by resurveying and clearing 13,238 Km. Other recorded key achievements include identified 69,613 ha of forest areas for bee apiaries and bee reserves will promote grounds for beekeeping practices; training on beekeeping techniques to 921 beekeeping groups and 7,320 beekeepers; provision of 14,076 improved beehives to beekeepers and associations. Despite these efforts, there is still massive encroachment into the forest reserves for other land uses; the supply and demand analysis based on NAFORMA data (2013) shows that the forest harvesting exceeds the Annual Allowable Cut (AAC) by more than 19.5 million m 3 ; land clearance for small-scale subsistence farming is one of the major causes of forest cover loss, largely due to increasing populations and low-intensity agricultural practices, and over dependence on woodfuel as major source of household energy. In addition, the administrative set-up has been weak especially in linking the local governments, regional administration and central levels. Worse still, TFS has experienced serious delays in recruiting new staff, probably due to complex bureaucratic recruitment procedures that must be adhered to as per public service regulations. The second TFS Strategic Plan (SP II) provides guidance on achieving its objectives for five years starting from July 2014 to June The SP II outlines the strategies and targets to achieve the objectives as well as key performance indicators as standard measures of performance. It also focuses on development of resources and assets, and improvement of the management systems. The implementation of the SP II requires transformational changes from the Business As Usual attitude to a more proactive engagement and adaptive management. The implementation of the Strategic Plan continues to be elaborated annually through formulation of a Business Plan (BP). This Business Plan for 2015/2016 FY describes the strategic management and administration; main stakeholders and their expectations; profiles of revenues (including sources of revenue and factors considered during projections); and plans and budgets for implementation of activities. Further, this Plan describes business environment and its implications that realizes the value for money and quality of services and operations In addition, the Plan elaborates in details the implementation of the set targets so as to achieve Objectives, Mission and the Vision of the Agency. The performance of this Business Plan will depend on the achievement of the planned milestones for this financial year. TFS will endeavor to strike a balance in conservation between sustainable management and utilization of the forest resources while implementing its Business Plan. Taking into account that there is widespread degradation of the existing forests due to illegal overharvesting in the production natural forests and illegal logging in protected areas like catchment forests, game and national parks, this Business Plan focuses to a large extent on investing in extensive tree planting in its 18 forest plantations, rehabilitation of degraded forest reserves and designation of new forest reserves (both natural and planted). Moreover, the Agency will continue to promote and facilitate the private sector, civil society and other stakeholders in sustainable management and utilization of forest and bee resources. Bussiness Plan for Financial Year

12 2.0 STRATEGIC MANAGEMENT AND ADMINISTRATION 2.1 Vision, Mission, Core Values and Objectives The operationalization of TFS Business Plan is in line with the Strategic Plan ( ) Vision, Mission, Core Values and Objectives. Vision: To be a center of excellence in conservation of forest and bee resources. Mission: To sustainably manage and utilize the national forest and bee resources in order to contribute to the social, economic, ecological and cultural needs of present and future generations. Core Values: Pursuant to the Vision and Mission, the following core values abbreviated are strongly adhered by TFS: a) Professionalism b) Effi ciency and Effectiveness c) Integrity d) Confidentiality e) Customer Focus f) Creativity and Innovation g) Accountability and Transparency h) Team work Objectives: According to Strategic Plan II (SP II) there are five objectives namely; A: HIV/AIDS infections reduced and supportive services to people living with HIV/AIDS improved; B: Good Governance and gender balance enhanced. C: Institutional capacity to deliver services strengthened; D: Forest and Bee resource base and Ecosystems Improved E: Utilization of quality Forest and Bee products enhanced. Crosscutting issues are addressed in objectives A and B, whereas core businesses of the Agency are addressed in objectives C, D and E. 2.2 Human Resources TFS requires different professional and technical cadres in order to execute its mandate. Currently, there are 1,832 staff, composed of 826 and 89 forest and beekeeping professional/ technicians respectively; and 713 forest and beekeeping attendants. Others include five 3 Bussiness Plan for Financial Year

13 human resource officers, three legal officers and 190 staff under supporting cadres. Effective management requires one forester to manage an area of 5,000 ha only, however the current ratio is 1:20,000; hence a deficit of 2,067 staff. Table 02 summarizes current human resources of the Agency and Appendix I shows breakdown of different cadres. Table 02: Current Human Resources of the Agency S/N Human Resources Cadre Existing Required Deficit 1. Chief Executive Directors Head of Units Forest Staff 1,501 2,865 1, Forest Officers (including Senior and Principal) Forest Assistants (Diploma & Certificate) 573 1, Forest Assistants (Operational) Beekeeping Staff Beekeeping Officers (incl. Senior and Principal) Beekeeping Assistants (Diploma & Certificate) Beekeeping Assistants (Operational) Other Cadres 10. Human Resource Officers, Accountants, Legal Officers and Economists among others TFS will review training needs and develop human resource development pragramme to address existing gaps in skills and knowledge. In that regard, the Agency will continue to facilitate both long and short term training programmes. Priority will be given to training programmes tenable within the country and in the region. Furthermore, follow up to the scheme of service and salary structure for TFS will be made for operationalization once approval is granted. 2.3 Procurement and Core Assets Procurement System TFS procurement arrangements for all major procurements are centrally managed by TFS Tender Board with exception of Sao Hill forest plantation which has been granted part of procurement decision making through a Delegated Tender Board. Zones and other forest plantations have power to carry out minor value procurements and supplies in line with Seventh Schedule of Public Procurement Regulations of To ensure smooth running of the Agency, all procurements will be carried out in accordance with the approved Business Plan and complemented by a procurement plan Core Assets According to TFS Establishment Order No. 269/2010 main assets vested to TFS include 506 national forest reserves. The number of forest reserves stated in the Order need to Bussiness Plan for Financial Year

14 be verified because preliminary field reports revealed that there are 455 forest reserves with total area of 14,256, ha; out of which 11 are Nature Reserves (305,600 ha). In addition, six declared bee reserves with total area of 31,374 ha and three proposed bee reserves covering an area of 8,392 ha. Also there are 18 forest plantations covering an area of 284, ha; out of this, planted area is 91,606 ha. Also TFS has mandate for the management of forests on general land. Other assets include 41 heavy plants, 3 patrol boats, 202 vehicles, 383 motorcycles, 643 buildings (offices and residential houses); 23 garages, 12 social hall facilities and 9 dispensaries. Major TFS assets are shown in Appendix II. 2.4 Administration TFS governance model operates as stipulated in Establishment Order No. 269/2010 to ensure proper management and overseeing TFS implementation. The Permanent Secretary (PS) is the Principal Accounting Officer for the Ministry and is also responsible for ensuring effective and efficient management of financial and physical resources allocated to TFS through eyes-on and hands-off principle. The Permanent Secretary is overseeing the interests of the ministry and the government in general through the Ministerial Advisory Board (MAB) that advises the Minister on the operation and performance of TFS. The Chief Executive remains the Accounting Officer who ensures proper management of resources endowed including revenue and expenditure for the Agency under discreet and cost-effective manner. TFS Management Team at the Headquarters constitutes of the Chief Executive, Director of Resources Management, Director of Planning and Resources Utilization, Director of Business Support Services, Chief Accountant, Chief Internal Audit, and Managers for Legal Services, and Procurement & Supplies. Currently, the headquarter of TFS is in Dar es Salaam, Mpingo House at Ministry of Natural Resources and Tourism, along Nyerere road. Plans are underway to shift TFS Headquarters elsewhere including looking opportunities for creating investments that will broaden revenue base in short, medium and long- terms. For the purpose of improving services, TFS operates in seven zones and 18 forest plantations. The seven zones are designated as: (i) Eastern Zone (Dar es Salaam, Morogoro and Pwani regions) with Head Office in Kibaha in Coast Region, (ii) Southern Zone (Lindi, Mtwara and Ruvuma regions) with Head Office in Masasi township in Mtwara Region, (iii) Southern Highlands Zone (Iringa, Mbeya, Njombe and Rukwa regions) with Head Office in Mbeya City, (iv) Northern Zone (Arusha, Kilimanjaro and Tanga regions) with Head office in Same Township in Kilimanjaro Region, (v) Western Zone (Katavi, Kigoma, Shinyanga and Tabora regions) with Head office in Tabora Municipality, 5 Bussiness Plan for Financial Year

15 (vi) (vii) Lake Zone (Geita, Kagera, Mara, Mwanza, and Simiyu regions) with Head office in Mwanza City, and Central Zone (Dodoma, Manyara and Singida regions) with Head office in Dodoma Municipality. The forest plantations are as presented in Table 03. District Forest Managers (DFM) have been placed to districts to ensure effective management of national forest and bee resources. Currently, a total of 120 districts have DFMs out of 169 districts of the Mainland Tanzania. List of District with DFMs is shown in Appendix III. Table 03: List of TFS Forest plantations S/N Name of Forest Plantation Location Planted area (Ha) Expansion area (Ha) Area with Natural forest Total area (Ha) 1 Buhindi Mwanza 3, , , , Kawetire Mbeya 2, , , , Kiwira Mbeya 2, , Korogwe Tanga ,805 5 Longuza Tanga 1, , Mbizi Rukwa , , Meru/Usa Arusha 6, , , Mtibwa Morogoro 1, , North Kilimanjaro Kilimanjaro 6, , , North Ruvu Pwani , Rondo Lindi , , , Rubare Kagera 1, , , , Rubya Mwanza 1, , Sao Hill Iringa 52, , , , Shume Tanga 4, , Ukaguru Morogoro , , West Kilimanjaro Kilimanjaro 4, , , Wino-Ifinga Ruvuma 1, , ,001.0 TOTAL 91, , , , MAIN STAKEHOLDERS AND THEIR EXPECTATIONS In achieving its vision, mission and core functions; the Agency will adhere to its core values and cooperate with stakeholders of diverse interest in respect of forest and bee resources. TFS is also committed to provide sustainable and quality forest and bee products and services that cater for the anticipated needs. Detailed list of stakeholders and their expectations is shown in Table Actual area suitable for expansion will be verified after survey Bussiness Plan for Financial Year

16 Table 04: List of Stakeholders and their Expectations NO. STAKEHOLDER STAKEHOLDERS EXPECTATIONS 1 MNRT i) Well managed forest and bee resources; ii) Increase of forest area through afforestation and reforestation iii) Realistic strategic and business plans; iv) Performance reports complying with agreed formats and reporting schedules; v) Well managed TFS with reliable financial base; vi) Contribution to reviews of policies, programs and legislation. vii) Work performance based on forest policy, Act and regulation. 2 Government -Ministries, Independent Departments and Agencies (MDAs) i) Harmonized national policies, programmes and legislation ii) Timely and reliable technical support, guidance and advice; iii) Timely provision of information on forest and bee resources. iv) Coordination and collaboration in conservation and sustainable utilization. 3 Local Government i) Reliable technical guidance and advice; ii) Collaboration and sustainable partnership in the implementation of relevant policies, laws, programmes, iii) Increased forest based revenue 4 Local Communities i) Timely provision of services ii) Improved livelihood; iii) Cost and benefit sharing in resources management and use iv) Involvement in forest and bee resources management. 5 Forest and Bee based Industries 7 Research Institutions and Researchers 8 Traders of Forest and Bee Produce/Products i) Reliable supply of quality raw materials, i) Establish Public-Private-Partnership (PPP); ii) Timely issue of permits and sanitary certificates iii) Participation in management of forests and bee resources, ii) Prompt technical advice and reliable marketing information for their products i) Timely issue of permits ii) Prompt response and access to information iii) Technical, guidance, advice and financial support iv) Timely provision of information on forest and bee resources. i) Timely issue of permits and sanitary certificates, ii) Prompt technical advice and reliable marketing information for their products. 9 TFS Staff i) Conducive working environment ii) Timely provision of better remuneration based on outputoriented performance, iii) Job security, iv) Recognition, v) Career development. 10 Policy and decision makers i) Transparency and accountability in management of resources, ii) Well managed forest and bee resources iii) Right information at right time 7 Bussiness Plan for Financial Year

17 NO. STAKEHOLDER STAKEHOLDERS EXPECTATIONS 11 Development Partners (DPs) and International Organisations i) Realistic strategic and business plans that carter for both national needs and international obligations ii) Good governance and adherence to human rights, iii) Compliance to obligations (national, regional and... international), iv) Transparency and accountability in the management of resources, v) Opportunities for cooperation. 12 Civil Society i) Access to accurate information, ii) Opportunities for cooperation / collaboration iii) Well managed resources. 13 Conservation Funds i) Collaboration ii) Well managed resources iii) Transparency iv) Reliable information 14 Academia i) Consultations and advisory ii) Well managed resources iii) Access to information iv) Opportunities for cooperation and collaboration 15 Private Sector i) Access to accurate information. ii) Recognition of their stake in the strategic and business plans. iii) Participation in management of forests and bee resources. iv) Opportunities for cooperation and collaboration. 4.0 BUSINESS ENVIRONMENT AND ITS IMPLICATIONS During FY 2015/16 Business Plan, the Agency intends to sustain conservation of the resources endowed, through partnerships with stakeholders. TFS will operationalize key strategies under the SP II to meet priority targets for the FY 2015/16. The Agency is cognizant of challenges that will occur around the business environment and will utilize available opportunities to overcome these challenges. 4.1 Key Challenges In meeting its vision and mission TFS encounters a number of challenges in the areas of climate change, policy and legal environment, socio-economic, technological and institutional capacity factors among others Climate change Under the current global climate change, forest is among the hard-hit resources despite its contribution to mitigation (forest is the major carbon sink). Moreover, forest and bee resources provide livelihoods option to rural communities particularly during extreme drought caused by climate change. Climate change and variability have resulted into increase of fire incidences and diseases outbreak, diminishing of bee colonies, low nectar flow, reduced pollination, food insecurity, lack of pasture, and changes in seasonal Bussiness Plan for Financial Year

18 planting. The Climate Change 2014 synthesis Report (IPCC, 2014) shows that economies and businesses that depend on forest will be shocked by current climate change. This means, TFS business need to mainstream its plans into both climate change mitigation and adaptation undertakings Policy and Legal Framework Despite of conforming to the Executive Agency Act Cap 245 R.E that give provision for the establishment of Agencies, the TFS Establishment Order (GN 269/2010) has gaps and shortfalls that need to be addressed. The Agency implements the National Forest and Beekeeping policies of 1998, which have also gaps and lack articulation of emerging issues such as climate change and Millennium Development Goals (MDGs) that need to be addressed. Furthermore the operationalization of reviewed National Forest Programme is lacking government endorsement through Cabinet since the National Forest Policy is yet to be approved. The Forest Act Cap. 323, Beekeeping Act Cap. 224 and their Regulations lack comprehensive definitions and provisions of Agency s operations. There has been limited formulation of Regulations under Miscellaneous provisions of the Forest Act; to guide sustainable forest management, TFS businesses and law enforcement and powers to make regulations. In addition the Forest and Beekeeping Laws do not conform to some provisions of other environmental related laws like Environmental Management Act of 2004, Land Act of 1999 and Village land Act of The reviewed policies, laws and programmes are expected to improve the working environment including efficiency and effectiveness for TFS in implementation of its Business Plan. TFS has inherited forest asset Sale Agreement regime that was signed during privatization of public assets. This regime of sale agreements mainly involves the supply of pulp wood material and compels TFS to sale saw-log size material at a give-way pulpwood prices. This situation causes huge revenue losses to the Agency. Furthermore, TFS is bound to supply a fixed amount of wood to industries with such sale- agreement. Negotiation and review of assets sales agreements will reduce current revenue losses and pressure in allocation of raw materials among stakeholders Socio - Economic, Energy and Environment The majority of the rural communities are highly dependent on forests and bee resources for their livelihood. Forest and bee resources contribute significantly to the socio-economic wellbeing in terms of raw material supply, employment, food security, energy, environment protection among others. The national statistics hardly reflect the entire economic benefits of the sector in the estimation of the GDP. Forests and forest-based products and services are of potential economic undertakings for millions of labour-force of Tanzania. However, the current supply of raw materials does not meet demand for both domestic and foreign markets of wood products; and the values of ecosystem services are not well captured in other sectors development plans (Water, Agriculture, Hydropower, and Livestock). About 90% of energy consumed in the country is obtained from wood fuel. Moreover, energy demand in the form of charcoal is expected to continue being one of major drivers of deforestation in Tanzania. Currently, there is limited possibility for a major shift to affordable alternative energy sources that will substitute wood fuel. 9 Bussiness Plan for Financial Year

19 The National Forest Resources Monitoring and Assessment (NAFORMA) data of 2013 indicate that the forests stock is meager estimated at 3.3 billion cubic meters (m 3 ); out of which 3.2 billion m 3 (97%) is obtainable from natural forests and 0.1 billion m 3 (3%) from planted forests. The Mean Annual Wood Increment (MAI) is estimated at 83.7 million m 3. About 40.9 million m 3 is available in the protected areas such as national parks, nature reserves, catchment forest reserves and other wildlife reserves where harvesting of tress is not allowed. The information on wood supply in the country show that allowable cut in production forests in 2013 was estimated at 42.8 million m 3 per annum, while the annual wood demand stands at 62.3 million m 3 per year thus making a deficit of about 19.5 million m 3 per year. Illegal harvesting in protection and production forests is contributing to the national annual deforestation rate of 372,000 ha that adds to this deficit of utilized wood. Since, majority of Tanzanians particularly, those living in rural areas highly depend on forestry for their livelihood, it is evident that forests will be subjected to more deforestation, degradation and unsustainable utilisation. Agricultural expansion, livestock grazing, wildfires, over-exploitation and unsustainable utilization of wood resources contribute to deforestation Technological advancement Under the current climate change most of the Technical Orders cannot be operationalized hence have to be reviewed to mainstream adaptation into business. Rampant illegal logging and illegal timber trade, uncontrolled wildfires, climate change impacts and use of inefficient wood processing technologies have negative effects on conservation. Traditional beekeeping practices has not been effective, improved technologies such as queen raring; use of modern beehives, managing bee houses need to be integrated and enforced to increase productivity. Packaging and storage technologies have highly advanced need to be adopted to increase accessibility to markets Institutional capacity and framework TFS has demonstrated the capacity to mobilize financial resources that would help speed up conservation efforts, economic growth and livelihood. Nevertheless, the current arrangement requires TFS to remit at least 40% of the revenue collection to Treasury to fulfil other government obligations. Despite this achievement, conservation and management of forest and bee resources are not effectively performed. There are still limited flexibilities, freedoms and authorities over its resources to address pressure for improvement through the development of challenging targets, recruiting human resources and build its sustainable financial base. There are also inadequate and unreliable working facilities and infrastructure a situation that may undermine the role of TFS. In addition, the multiplicity in the management responsibilities and ownerships under different institutional mandates with different capacities has created gaps and challenges in managing forest resources efficiently and effectively. These gaps and challenges include fragmented/uncoordinated efforts, limited abilities and flexibilities to promptly respond to emerging issues, and sectoral approach on issues (e.g. conservation), which require strategic coordinated efforts etc. The gaps and challenges in managing these resources are equally Bussiness Plan for Financial Year

20 manifested by institutional setting, land use issues and land cover changes in particular deforestation, climate change, governance, population growth, low intensity agricultural practices such as shifting cultivation. In addition, the administrative set-up has been weak especially in linking the local governments, regional administration and central levels. Another challenge is the parallel administrations whereby one authority is accountable but not responsible while the other is responsible but not accountable resulting into ineffective forest resource management. Furthermore effective conservation of ecosystems has been impaired by inadequate coordination and insufficient resources for the management Staffing and Recruitment There is shortage of staff in both forestry and beekeeping sectors at all levels. In order to effectively manage the forestlands mandated to it, TFS need to employ more than 2,000 foresters. This is due to vast forest areas that need to be managed. In some cases, one forest officer manages up to 130,000 hectares of natural forests. Meanwhile some data shows a standard rate of 5,000 ha per forester. Also, the number of beekeeping staff is too thin to be noticed particularly at district and lower levels. Worse still, TFS has experienced serious delays in recruiting new staff, probably due to long bureaucratic recruitment procedures that must be adhered to as per public service regulations. Further, the present organization structure needs to be operationalized in tandem with TFS s Scheme of service which is yet to be approved. TFS working and office facilities (buildings and vehicles) are dilapidated and provide unfavorable working conditions. Therefore, TFS will strive to improve its procurement efficiency with introduction of service level agreements. 4.2 OPPORTUNITIES FOR SUCCESS To ensure sustainable growth and development of the Agency, the TFS 2015/16 business will explore opportunities emanating from climate change; policy and legal framework; socio-economic, energy and environment; technological advancement; and institutional framework Climate Change Tanzania has established her National Climate Change Strategy (NCCS), the National Adaptation Plan of Action (NAPA), the Readiness for REDD+ Framework, NAFORMA and the National Carbon Monitoring Centre (NCMC) which provide opportunities for international funding of Climate change adaptation interventions under various international funding arrangements such as the Global Environment Facility (GEF), the Global Climate Fund (GCF), Forest Investment Programme (FIP) and the Norwegian Forest and Climate Change Initiative among others. The Agency will mainstream climate change mitigation and adaptation issues into its strategies so as to be able to access various international funding mechanisms. During this BP the Agency will write proposals related to NAPA, conservation of forest carbon 11 Bussiness Plan for Financial Year

21 stocks, Enhancement of forest carbon, Reducing Emission from Deforestation and forest Degradation and Sustainable Forest Management (SFM). Other avenues to explore funding are from various bilateral and multi-lateral agreements including CBD, UNCCD, UNFF, UNFCCC, Forest Carbon Partnership Facility and UN-REDD. Bilateral agreements which provide for interventions targeting poverty reduction/livelihood provide basis for promoting beekeeping investments. This BP will ensure quick start follow-up of already approved projects (Enhancing the Forest Nature Reserves Network for Biodiversity Conservation in Tanzania (Connectivity) Policy and Legal framework The National Forest Policy of 1998 has been reviewed while the National Beekeeping policy is under review. The Forest Act Cap. 323, Beekeeping Act Cap 224 and their Regulations are not in conformity with the Establishment Order (GN 269/2010). Furthermore, Forest and Beekeeping laws need to conform to some key provisions of other environmental related laws like Environmental Management Act of 2004, Land Act of 1999 and Village land Act of There is an urgent need to have a review of legal and regulatory frameworks and guidelines that will create conducive environment for effective operationalization of TFS business plan. Therefore the Agency will continue to contribute to the review of miscellaneous provisions of Forest and Beekeeping laws. TFS will collaborate with MPM to mutually review the inherited forest asset Sale-Agreement regime that was signed during privatization of public assets Socio - Economic, Energy and Environment The implementation of Wood Fuel Action Plan provides an opportunity for sustainable forest management taking into account unsustainable exploitation of forest for charcoal making. During the current BP, TFS will disseminate the Wood fuel Action Plan and continue to implement the planned strategies in collaboration with stakeholders. The Agency will continue to expand its forest plantation estates, manage them sustainably and put more effort on insitu conservation of natural forest reserves. Natural regeneration will be given high priority based on lessons learnt from projects of HASHI, HADO, PFM, SULEDO, HIMA and other afforestation and reforestation campaigns. To address the inherited forest asset Sale-Agreement regime that was signed during privatization of public assets, TFS will embark on pulpwood production regime to meet the demand of 500,000 cubic metres for MPM. This situation will rescue the huge revenue loses to the Agency and meet a guaranteed amount of pulp wood supply to MPM which is under agreement Technological Environment Emerging technologies such as tissue culture, greenhouse, genetic cloning, stand a better chance to increase productivity and rescue of rare species. TFS will continue to pilot the use these technologies in the forest sector. This will not only improve nursery productivity and rescue of rare species but also will adopt and cope with the current climate changes. TFS also needs to re-class forest plantation sites and establish permanent sample plots in the Agency s plantation forests for monitoring site class change. The Agency will review Bussiness Plan for Financial Year

22 various Technical Orders such as Rotation age, Site Classes, Spacing, Permanent Sample Plots and Silvicultural operations. TFS will also employ smart technologies to monitor fire, track logs and manage forest plantation and bee apiaries. Efforts will be made to improve beekeeping productivity, sales and marketing Institutional Capacity In order for TFS to effectively fulfill its role, adequate financial resources, sufficient working facilities and infrastructure like roads, buildings, machinery and equipment must be developed, acquired and maintained without delay in an established organisation with a high degree of autonomy in its operations. TFS has the potential to perform better if its status can be raised from the Agency to an Authority in order to increase autonomy and flexibilities to address management challenges in a more efficient and effective manner; promote the potential for the continuous improvement of the services and improve the quality and value for money of the delivery of public services. In this way it is expected that the authority will enhance sustainable management of forest and bee resources, improve forestry services and increase its revenue base and thus contribution to the national economy in a more sustainable way. Furthermore, the proposed scheme of service stands a better chance to incentivize Agency staff and improve delivery of services. TFS will follow-up for the approval of its scheme of service and operationalize it; continue to recruit more staff; procure more working facilities and ensure favourable working environment. This will include strategies for having convenient office accommodation, staff housing for out-stations, and replacement of dilapidated vehicles and machinery. The Agency will establish MoUs with District Councils in order to enhance sustainable management of forest resources under its jurisdiction. Efforts will also be made to recruit forest guards and deploy forest managers in all national forest reserves. Collaboration with other Agencies such as Rural Energy Agency (REA), National Housing Corporation (NHC), TEMESA, TBA, TRA and other mutual funds will be emphasized. 5.0 PROFILES OF REVENUES 5.1 Sources of Revenue TFS is mandated to collect forest royalties and fees from forest and beekeeping products and services, which form revenue sources for financing the Agency of which the surplus collection has to be remitted to Treasury. The main revenue for FY 2015/16 will continue to be from sales of forest products and services. Table 05 summarizes types of forest products and services. 13 Bussiness Plan for Financial Year

23 Table 05: Types of Forest Products and Services, their Sources and Markets Products/ Services Source Market Standing trees for logs, pulp, veneer and poles Wood fuel (charcoal and firewood) Ecotourism Research sites and materials Telecommunication tower sites Mining and prospecting sites Medicinal plants Forest plantations, Natural forests including Mangrove forests, Forest Reserves and forests in general lands Forest Plantations, Natural forests Forest plantations, Catchment forests and Nature Reserves Forest plantations and natural forests Forest plantations and natural forests Forest plantations and natural forests Forest plantations and natural forests Sawmills, pulp & paper, chip & fibre board mills, Wood preservation plants, construction industry, furniture industry, foreign market Households, Industry, Institutions, hotels and restaurants. Domestic and foreign tourists Individual researchers, Academic institutions, research organizations and Training Institutions Telecommunication industry Mining companies Pharmaceutical industry, Traditional healers. Source of Complementary of products and services Local Government forests, Village land forests, Private forests, Woodlots, Steel & other substitutes industry, imports. Electricity generators, Gas supplies, coal mines, kerosene, Solar, biogas. Private forests, local government forests and village land forests Private forests, local government and village land forests Landsat receivers; Private forests, local government and village land forests Private forests, local government and village forest reserves Synthetic pharmaceuticals, acupuncture Honey, beeswax and bee colonies Bee reserves, Apiaries in plantations and natural forests Beekeeping production centres Foreign and domestic markets: Industry (pharmaceutical inclusive), Traditional healers, Households & Hotels Private bee reserves, apiaries in local government and village land forests, Private forests/farms Other sources include, bark (cinchona and mimosa), essential oils, palm leaves, gums and resins, raphia and bamboo among others will be part of sources of revenue. 5.2 Revenue Projections Table 06 presents trend of revenue projections and their actual collections for the past three years. Bussiness Plan for Financial Year

24 Table 06: Trend of Revenue Collection Financial Year Projection (TZS) Actual collection (TZS) Achievement (%) 2011/12 54,156,486,816 63,752,485, /13 75,137,556,879 62,668,602, /14 68,173,076,760 80,441,400, /15 74,435,881, ,026,001, /16 87,596,411,000 During FY 2012/13 revenues were projected at 39% increase from that of FY 2011/12. However, based on actual collections projection for FY 2013/14 was dropped by 9% from that of FY 2012/13. As for FY 2014/15 the projection was estimated at 9% increase from FY 2013/14, indicating a constant increase. Looking at the trends of actual collection during the same fiscal years, the projection for the FY 2014/15 as of March 2015 is likely to be achieved. In this regard, TZS 87,596,411,000 has been set for FY 2015/16 representing an increase of 7.8% instead of the constant increase rate of 9% from 2014/15 revenue projections of TZS 81,228,495,000 inclusive of VAT and Cess. The incremental monetary value is about at 6.37 billion. This increase could be explained by a drop in allowable cut from forest plantations and anticipated increase in royalty and fees by reviewing of GN 433 of Summary of revenues by sources and projected amounts to be collected under each item during the financial year 2015/16 are indicated in Table 07. Table 07: Summary of Revenue Projections for FY 2015/16 by Item S/No. Item Description of Item Amount (TZS) 1 Application Fee 387,607,000 2 Export Certificates and Permits 1,365,976,000 3 Rent from Telecommunication 310,537,000 4 Forest Royalties 53,067,188,000 5 Registration Fees 3,121,761,000 6 Receipts from Honey and beeswax 95,400,000 7 Miscellaneous Receipts & Other Receipts 2,210,570,000 8 Compounding Fee 2,509,438,000 9 Logging &Miscellaneous Deposit Account 17,088,100, A Sub Total (Direct TFS Collection) 80,156,577, Tanzania Forest Fund (3% royalties & 2% fees) 1,831,557, B Sub Total (TaFF) 1,831,557, VAT 4,606,136, Cess 1,002,141, C Sub Total (VAT & Cess) 5,608,277, GRAND TOTAL (A+B+C) 87,596,411,000 3 Data reflect all revenues collected including Cess and VAT 4 The figure excludes VAT (TZS 5,316,037,000) and Cess (TZS 1,476,677,000). Total projection inclusive of VAT and Cess is TZS 81,228,495,000 5 Collections as at 31st May, Bussiness Plan for Financial Year