Africa-Press – Rwanda. The government is moving to terminate its contract with Sawmill East Africa Ltd (SEAL), which has pulled out of a deal to harvest and replant four state forests, officials have said.
The update was shared by Concorde Nsengumuremyi, Director General of the Rwanda Forestry Authority (RFA), while appearing before the Parliamentary Committee on Land, Agriculture, Livestock, and Environment on October 30.
The matter was raised following findings from the Auditor General’s Report for the fiscal year ending June 2024.
The Cabinet approved the concession agreement between the Government of Rwanda and SEAL in 2018 as part of efforts to privatise the management of state forests. The target was to have 80 per cent of state forests under private management by 2024.
Under the deal, the company was tasked with harvesting and replanting 5,000 forest units in Rusizi, Muhanga, and Huye districts, while also investing in wood-based value addition, including furniture and other products.
Firm backs out of deal, owes government Rwf1.2 billion
Nsengumuremyi said SEAL formally informed the government that it was no longer interested in continuing the project.
“The company itself took the step and informed us that it was no longer interested in implementing the agreement. We conducted a joint assessment and found that it owes the government over Rwf 1.2 billion before the contract is terminated,” he said.
A meeting held on January 14, 2025, reviewed the progress of the agreement, followed by a joint field assessment on February 17, 2025, to evaluate activities carried out by the firm — including the number of forests replanted, harvested, and left unrehabilitated.
The assessment revealed that the debt stems from the value of harvested forests and compensation for damage caused by failure to reforest harvested areas.
“The company did not implement the agreement as signed and requested discontinuation. We have therefore started the termination process, and the company will be required to pay the owed amount,” Nsengumuremyi said.
He added that RFA has engaged the Rwanda Development Board (RDB) and the Ministry of Environment to follow up on the termination process.
Currently, the forests previously managed by SEAL have been left without a managing or harvesting firm, prompting RFA to call for an expedited conclusion of the contract termination.
Lawmakers call for better oversight
Members of Parliament urged government institutions to strengthen oversight of forest management contracts to avoid similar setbacks.
MP Alice Muzana, Chairperson of the Committee, called for a comprehensive review of the SEAL agreement to prevent potential litigation against the government.
“There should be sufficient monitoring to prevent inefficiencies in forest management and harvesting by private companies,” added MP Jean René Niyorurema.
He warned that some firms replant trees after harvesting but fail to maintain them, resulting in losses.
MP Olive Uwamurera also emphasised the need for a national database of state forests, warning that lack of clear management records could lead to encroachment by residents.
Progress in forest privatisation
Nsengumuremyi reported that by 2024, 32,000 hectares — about 66 per cent of state forests — had been privatised under the National Strategy for Transformation (NST1).
Negotiations are ongoing for another 15,198 hectares with potential investors, pending Cabinet approval.
The process involves field inspections, due diligence, and technical assessments supervised by the Prime Minister’s Office.
The government’s overall target is to privatise 80 per cent of state forests, equivalent to 49,188 hectares.
“New agreements now require companies to pay the full amount owed before beginning harvesting,” Nsengumuremyi said.
He explained that private forest management is conducted through two models:
Concession agreements, where firms pay the government based on the volume of harvested wood; and Co-management agreements, which involve joint operations between the state and private entities.
Forestry sector contribution
Rwanda’s forestry sector has grown significantly, with revenues rising from Rwf 164 billion in 2007 to Rwf 649 billion in 2021.
With full privatisation of state forests, annual revenue is projected to exceed Rwf 200 billion.
State forests cover 61,485 hectares, representing 27 per cent of the country’s total forest area, excluding national parks.
Overall forest cover stands at 30.4 per cent, or 724,662 hectares — composed of 53 per cent plantations, 21 per cent wooded savannas, 19 per cent natural rainforests, and 6.2 per cent shrubs.
For More News And Analysis About Rwanda Follow Africa-Press
