The key to Iringa’s Economy

FORESTRY – THE KEY TO IRINGA’S ECONOMY!

The forestry industry is key to Iringa’s economy. Interviews reveal that for the majority of people in rural areas, the sale of forestry products is the main source of income. Qualitative interviews with farmers, traders and officials in Mufindi, Mafinga and Kilolo reveal that the sale of timber products constitute up to 80% of households’ income. Statistics from the Iringa socioeconomic profile, 2013 show that the region ranks second nationally in per capita income. Interestingly, Mufindi and Mafinga, which are major wood/timber production areas, contribute nearly half of the region’s GDP, which signifies the direct and indirect contribution of the timber industry.

Direct contribution is through participation in the value chain including tree farming, harvesting of trees, wood products processing (timber, poles, pulpwood, paper, veneer), transportation, sales of wood/timber products and exportation. Also major tea factories either plant trees or buy wood products used for boilers. Other direct contributions include various taxes, fees, charges, levies and royalties to the government; for instance, local governments in the Iringa region derive on average more than 50% of their revenue from levies charged on royalty and sales of wood/timber products harvested in their areas. Also, there are contributions in terms of employment in large plantations and factories like Sao Hill and Mufindi Paper Mills, which employ thousands of individuals.

Furthermore, qualitative interviews revealed that companies in the wood/timber industry, aside from offering employment opportunities and paying taxes, practice corporate social responsibility by supporting the surrounding communities including construction of schools, hospitals, supplying tree seedlings and water infrastructure. Since this industry employs the majority of the population, especially in rural areas, financial services targeted towards supporting this sector will have a ripple effect in inclusive growth