ABSTRACT
This chapter uses intersectoral transactions data captured in the United Republic of Tanzania’s social accounting matrices to assess the economy-wide trade-offs involved in the decision to cut a hectare of standing forest. Each hectare of standing forest contributed to the sectoral GDP of forestry and hunting, which stood at TSh 296.7 billion in 2001, translating to TSh 6,168 per ha per year (2001). Felling a hectare of such a forest has two consequences: first, it will not contribute to the current GDP estimate of TSh 6,168 per ha per year (2001). Second, the potential value added by forestry and hunting to other sectors of the economy - in terms of income and valued added taxes - to a total quantity estimated in the present study at TSh 10,599 per ha per year (2001) will also be lost. Accordingly, clearing a hectare of standing forest translates into a total loss of TSh 16,767 per ha per year (2001) in terms of direct and indirect losses. Additionally, the study shows that an increase in household consumption of forestry and hunting sector output results in an increase in GDP, household income, wage rates and composite commodity prices. These predictions are clearly of importance in informing forest policy: in the interest of improving the welfare of rural poor, rural non-poor, urban poor and urban non-poor households, forest policies should encourage growth in sectors that make use of forestry as an input in their production.
