Implementing Agency:
Department For International Development (DFIDSA)

Project Code: 032-502-002	Start Date: 15-Jul-92	End Date: 01-Dec-92
Commitment: £87 500	Status: Completed	Type of Funding: Bilateral - TC

Project Objectives:
The objectives of the one month consultancy were to determine the scope for a forestry project in Lesotho. If justified, to also prepare detailed proposals for consideration and possible funding by DFID. The project will cover environmental rehabilitation and conservation, and poverty reduction. NRI supplied the economist input to the consultancy. The Terms of Reference for the economist are: to be responsible for the economic inputs required for analysis of current and future assistance. With the other team members, investigate the wider policy and sectoral content of the forestry sector, identifying major issues and constraints, specifically to identify the factors that are contributing to the wood deficit and environmental degradation problems, identify all significant (actual or potential) uses of trees in Lesotho. To summarise the domestic fuelwood and poles demand/supply situation facing Lesotho: On the demand side, review critically the analysis in the Lesotho Energy Master Plan .In particular, check that the income and price elasticities used reflect realistic scenarios of population and economic growth, urbanisation and the (potential) use of rural electrification arising out of the LHWP and to consider the non-cash demand for fuelwood and domestic energy needs and attempt a quantification. On the supply side break down the sources of wood supply (imports, forest reserves , own resources, collected brushwood) and describe likely future scenarios for each. Consider how the market conditions for wood products in RSA might develop and how this would affect exports to Lesotho. In consultation with the other team members describe,and attempt to quantify where possible, the environmental case for afforestation. Compare it with other methods to achieve the same environmental objectives. In collaboration with the forestry consultant, estimate the financial and economic costs of production of wood from typical Forestry Division woodlots. Compare with the projected financial costs of imports to the consumer from RSA and the imported costs of foraged wood and dung as fuel. Carry out sensitivity analyses of possible improved forestry practices and deduce the potential for substitution. Recommend changes in marketing of produce from woodlots and describe how these should be implemented by the Forestry Division, Village Development Committees, or other village groups, and incorporate into the project proposals. With other team members, review the institutional capacity of the Forestry Division, including its capacity for economic and strategic planning. Recommend changes in structure, and required (including training) to correct weakness.