Resource information
Approximately 85% of Malawi’s population live in rural areas and depend in some way on forests for their livelihoods. Recent government policies have highlighted how forest resources could do more to help reduce poverty through the development of small and medium forest enterprises (SMFEs). This scoping study describes the main opportunities and constraints facing SMFEs in Malawi.The authors draw on field-based interviews with entrepreneurs involved in four different forest product value chains - plantation timber, cane furniture, fruit juice and wood carving - and an analysis of national policies and how they affect SMFEs.The study finds that, excluding cane products, the demand for most SMFE products seems strong. As a result, the increasing pressure that SMFEs put on the forest is a major challenge, both for them and the country. The perception that SMFEs are acting illegally and pose a threat to the natural environment may translate into more hostile government policies. However, the advantage of SMFEs is that the resource on which they depend is renewable if properly managed. International demand is high for ‘natural’ and community-based’ products which offers an opportunity for SMFEs to reduce local poverty through their businesses.The implications for government policy include:
there is a need for champions of SMFEs to clearly articulate to government and NGOs that SMFEs can play a role in the sustainable management of forest resources
there is also a need to demonstrate the potential of the SMFE sector as an engine for economic growth and poverty reduction
security of resource access is key to encouraging financial service providers to offer affordable credit to SMFEs - potential investors must also be helped to see the SMFE subsector as an area with potential for growth and investment
governments should consider creating credit guarantee schemes and a credit reference bureau to assist SMFEs to access loans from non-government finance institutions
to achieve economies of scale, improve production processes and encourage further investment, producer associations must be formed and strengthened - this can be achieved through training and encouraging the formation of a full-time secretariat
while the majority of current policies and programmes appear to be supportive of SMFEs, the Department of Forestry should play a more proactive role in developing SMFEs, not just in monitoring and controlling forest use.
