Charcoal is a burning issue

Faisoni Kandoje, 38, has sold charcoal for nearly two decades. Each day he sets up his stall along one of the major highways in Blantyre, Malawi's commercial hub, to provide for himself and his four children.

Charcoal production has been illegal since independence from Britain in 1966, and although the authorities turned a blind eye to the industry after Malawi's autocratic leader, Hastings Kamuzu Banda, was voted out of office in the 1994 elections, the government is once again clamping down on the practice.

"This is where my bread and butter come from; this is where I get money to pay school fees for my children," Kandoje told IRIN. "They should find better ways of controlling the unnecessary cutting down of trees in our forests, rather than looking at us as criminals."

The government recently signed an edict empowering soldiers to arrest people found producing charcoal, but usually those involved in the multimillion-dollar industry only have their charcoal and tools confiscated.

Thomas Ngozo, 45, said he would stop producing and selling charcoal when the government and money-lending institutions provided him with access to loans.
"Banks only offer loans to people who are already rich. What then do they expect us to do? We have families to feed and it is this very illegal business that keeps us going," he told IRIN.

Calls for regulation

A report released in December 2007: Charcoal - the reality: A study of charcoal consumption, trade and production in Malawi, concluded that regulation of the charcoal industry, as opposed to criminalisation, would provide substantial tax revenues and make the sector sustainable.

The document was produced by the Malawi Forest Governance Learning Group (FGLG), the Institute for Environment and Development (IIED), Community Partnerships for Sustainable Resource Management in Malawi (COMPASS II) and the Improved Forest Management for Sustainable Livelihoods Programme (FMSLP).

Between 1990 and 2005 Malawi lost nearly 13 percent of its total forest cover due to fuel-wood collection and subsistence commercial agriculture. The scale of charcoal production, if regulated, could make it one of the country's top earners after tobacco and tea, and would also encourage the sustainable use of wooded areas.

Charcoal is potentially a renewable forest product, but the current production and distribution methods in Malawi prevent reinvestment in the next cycle of harvest. Reversing the lack of incentives  for investment is a critical political and economic issue

"Charcoal is potentially a renewable forest product, but the current production and distribution methods in Malawi prevent reinvestment in the next cycle of harvest. Reversing the lack of incentives for reinvestment is a critical political and economic issue," the report said.

"If the charcoal trade was regulated and taxed, government could raise substantial revenues, using the estimated industry worth of K5.78 billion (US$41.3 million) per year. Value Added Tax (VAT) alone could generate more than K1 billion (US$7 million) annually in revenue," the authors noted.

According to recent estimates, 90 percent of urban residents rely on biomass energy, mainly charcoal, for cooking, and spend more than three times as much on the fuel as they spend on electricity.

The report's convenor, economist Patrick Kambewa, told IRIN: "There is huge potential in the charcoal trade, and government - through its agents and ministries, such the Malawi Revenue Authority and the Ministry of Finance - can devise ways of collecting tax from those involved in the trade.

"Money can be collected at village or community level from producers, transporters and vendors, but the only challenge would be in accountability," Kambewa said.

He said criminalising the industry meant arresting thousands of people involved in what is perhaps Malawi's most substantial, pro-poor forest industry, which the report estimated employs about 93,000 people as producers, bicycle transporters and roadside or urban vendors.

"Criminalising ... [it] has not helped matters, and all government ought to do is look into issues of taxation and rehabilitation of forests," said Kambewa. "People should be trained on how to manage forests at community level. They should be told about the importance of reforestation and the need to manage such resources."

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