Publication - The Forestry Commission of Ghana

PROPOSAL FOR THE
ESTABLISHMENT OF A NATURAL
RESOURCE ENDOWMENT FUND BY
THE GHANA FORESTRY
COMMISSION.
BY DR KWAKYE AMEYAW
OPERATIONS MANAGER
FSD
OUTLINE OF PRESENTATION
1.0 BACKGROUND INFORMATION ONENDOWMENT FUND.
1.1 TYPES OF ENDOWMENT FUND.
2.0 FUNDS OF THE FORESTRY COMMISSION.
3.0 JUSTIFICATION FOR THE PROPOSED ENDOWMENT FUND FOR
FORESTRY COMMISSION.
4.0 POTENTIAL BENEFITS OF THE PROPOSED ENDOWMENT FUND.
5.0 DRAFTING OF AN ENDOWMENT AGREEMENT
6.0 FORMATION OF A PLANNING COMMITTEE FOR ORGANISING THE
PROPOSED ENDOWMENT FUND.
OUTLINE OF PRESENTATION CONTN’D
7.0 SUGGESTED POTENTIAL CONTRIBUTORS TO THE PROPOSED
ENDOWMENT FUND.
8.0 FORMATION OF AN ENDOWMENT FUND BOARD OF
TRUSTEES.
9.0 CONCLUSION.
BACKGROUND INFORMATION ON
ENDOWMENT FUND
• An endowment fund is an investment fund set up by an
institution in which regular withdrawals from the invested
capital are used for ongoing operations or other specified
purposes. They are funded by donations, which are tax
deductible for donors.
• An endowment fund is created when a donor or the Board of
Trustees specify that a gift is to be invested and only the
income earned on that gift may be spent for a specific purpose.
• The gift amount is referred to as the principal or corpus and is
held in a fund that is managed by the Finance Department.
BACKGROUND INFORMATION ON
ENDOWMENT FUND CONTN’D
• An endowment fund can also be defined as a fund from which
the income is used currently and the principal continues to be
invested.
• As the fund grows, the income the fund generated will also
increase. Each year, the concerned organization will benefit
from a purchase or other expenditure that is not funded by the
annual budget. For example, one Department, division or unit
may use funds from an endowment fund to purchase the
entity’s sets of furniture repaired and polished. Another may
purchase a much-needed colour printer for the department’s
office using income from its endowment fund.
BACKGROUND INFORMATION ON
ENDOWMENT FUND CONTN’D
• A gift to an endowment fund is a gift that extends into the
future, because the principal remains intact to produce income
for years to come.
• Giving to an endowment fund is appealing to prospective
donors because their gift will continue benefiting the
organization long after they are gone.
TYPES OF ENDOWMENT FUND.
There are two basic types of endowment funds
namely;
A. True Endowment.
B. Quasi Endowment.
TYPES OF ENDOWMENT FUND.
True Endowment
• A true endowment is defined as an endowment in
which the donor stipulates that the amount donated
(corpus) must be held inviolate and in perpetuity and
invested to generate income to be spent for a
specific purpose.
TYPES OF ENDOWMENT FUND.
Quasi Endowment
• Funds that are designated as endowment by the governing board of an
institution are called quasi endowment. These funds are also invested
for the purpose of generating expendable income for a given purpose,
but, as the funds are internally designated as endowment, the
governing board can decide to spend the funds at any time.(E.g. the
Forestry Commission Board).
• In some cases, donors will allow for the corpus of their endowment to
be spent. This is categorized as a quasi endowment.
FUNDS OF THE FORESTRY COMMISSION
According to Section 19 (1) (a-d) (2)(a-c) (3) (a-d) and (4) of the
Forestry Commission Act 571 of 1999.
The funds of the Commission shall be:
1. Such monies as Parliament may provide to the Commission
for the performance of its function.
2. Monies due to the Commission under this Act and any other
enactment.
3. Loans granted to the Commission and grants.
FUNDS OF THE FORESTRY
COMMISSION CONTN’D
4. For the purposes of increasing its funds, the Commission may
determine the fees to be charged:
• For provision of advice and technical services.
• In respect of the development of plantation and game ranches
and
• For provision of technical and advisory services and market
intelligence to operators in the time industry.
FUNDS OF THE FORESTRY
COMMISSION CONTN’D
5. The Commission may in respect of:
• Its functions conduct pre-shipment inspection and examination of timber and
forest products.
• Its function to vet contracts for the exportation of timber, wood and wildlife
products.
• Entrance by any person to a protected area charge such levy or fee as the
Minister may on the recommendation of the Commission by Legislative
Instrument prescribe.
6. The funds of the Commission shall not include the export levy payable to the
Commission under the Trees and Timber Decree 1974 (N.R.C.D.273) as amended.
JUSTIFICATION FOR THE PROPOSED ENDOWMENT
FUND FOR FORESTRY COMMISSION.
The reason that mainly accounts for the performance gaps in the Forestry
Commission’s work plans are inadequacy and erratic flow of funds.
It implies that, so long as this situation persists, the Forestry Commission shall
always remain incapable of executing its legal mandate for protecting,
developing and sustainably managing the forest and wildlife resources of the
country. In my opinion, the funds that are likely to be generated through the
establishment of the endowment fund shall constitute a reliable source of
funding which, when prudently managed, can be used to augment the
shortfalls in the financial inflows.
POTENTIAL BENEFITS OF THE PROPOSED
ENDOWMENT FUND
1.
Natural Resources Endowment Fund (NREF) programs will foster community
reliance and capability in managing natural resources to provide important
socio-economic and environmental benefits today and for future
generations.(Defunct community structures can be revived when money is
available to provide the much needed incentives in that regard.)
2.
Direct funding for the conservation and management of important forest sites
will lead to greater protection and generate significant environmental services
(e.g. water, carbon sequestration, biodiversity) that will benefit society at a
local, regional, and global level.
3.
Selling these services globally could generate significant long-term revenue
flows that support the NREF’s mission.
DRAFTING OF AN ENDOWMENT
AGREEMENT
The underlisted are suggested practical steps to be taken in
setting up the proposed endowment fund:
1. Form an Ad Hoc Committee to draft the endowment
agreement. It should be composed of at least one person with
an experience in Endowment Fund administration, hopefully
an attorney, an accountant, and some people with business
acumen.
2. Sign Agreement. The agreement is suppose to be signed into
effect by the appropriate authorities. Eg, Hon Minister for
Lands and Natural Resources, Chief Executive of the Forestry
Commission and Chairman of the Forestry Commission
Board.
FORMATION OF A PLANNING COMMITTEE FOR
ORGANISING THE PROPOSED ENDOWMENT
FUND
Once the endowment fund agreement has been
singed to bring it into effect formally, it paves the
way for the CEO of the Forestry Commission to set
up a six-member planning committee to organize
the launching at an appropriate venue which is
most likely to attract higher public patronage eg.
The Accra International Conference Centre.
SUGGESTED POTENTIAL
CONTRIBUTORS TO THE PROPOSED
ENDOWMENT FUND
The under listed potential donors are to be invited:
• All Metropolitan, Municipal and District Assemblies(MMDAs)
• All Timber Companies
• All Mining Companies
• Road Construction Firms
• All Paramountcies
• All past chief farmers
• Cocoboard
• Ministry of Foreign Affairs (MOFA)
• Lands Commission
• Ministry of Lands and Natural Resources (MLNR)
SUGGESTED POTENTIAL CONTRIBUTORS TO
THE PROPOSED ENDOWMENT FUND
CONTN’D
•
Ministry of Environment, Science, Technology and Innovation
.
(MESTI)
•
Office of The Administrator of Stool and Lands (OASL)
•
Minerals commission
•
Chamber of mines
•
Survey Department
•
Geological Survey Department
•
Universities/Academia
•
Building /Road Contractors
FORMATION OF AN ENDOWMENT FUND
BOARD OF TRUSTEES.
• It is proposed that, after raising the funds successfully, the Chief Executive
Officer of the Forestry Commission forms a Board of Trustees to administer
the fund.
• The Committee will invest the initial funds, monitor the funds, and decide on
how the income will be used each year.
• The suggested membership should consist of representatives from the
following; Departments/Units/Divisions.
i. Finance and Administration-Chair
ii. Legal Department
iii. Corporate Planning Monitoring and Evaluation (CPME)
iv. Wildlife Division (WD)
v. Timber Industry Development Division (TIDD)
vi. Forest Services Divisions (FSD)
vii. Forestry Commission Training Centre (FCTC)
viii. Resource Management Support Centre (RMSC)
FORMATION OF AN ENDOWMENT FUND BOARD
OF TRUSTEES CONT’D
The Board of Trustees may have to set up the mechanics. Select a
broker or foundation to hold and invest the funds. Set up bank
accounts to receive donated funds and fund distributions.
CONCLUSION
It would be appreciated, if the proposal would be endorsed by the
Chief Executive for approval by the Board of Commissioners of
the Forestry Commission in order to create an alternative source
of funding for various forestry and wildlife operations across the
country.