the economic valuation of the proposed ... - Nature Uganda

for in the National Forestry and Tree Planting Act, the National Environment Act and provisions of the multilateral
environmental agreements, especially the Convention on Biological Diversity. The compensation would also
conform to the social and environmental safeguard policies of the Government of Uganda and its development
partners, including the need to conduct a thorough environmental impact assessment (EIA). The appropriate level of
compensation the developer will be required to pay is US$45.1 million, payable to the NFA to support conservation
activities in the remaining part of Mabira CFR and other reserves.
The study also noted that Government could also waive the requirement for compensation. The study however,
noted that such an action would tantamount to provision of a subsidy to SCOUL amounting to US$45.1 million or the
total economic value of the lost value of the forest due to the proposed change in land use. The waiver would also
tantamount to a gross policy failure, particularly in view of the efficiency questions surrounding SCOUL.
The study also noted that if the developer paid the US$45.1 million compensation, they would in effect be purchasing
7,186 ha of Mabira CFR at a fairly high cost per hectare. Land in the vicinity currently goes for UShs 500,000 to 1,000,000
per acre (or Ushs 1,250,000 –2,500,000 per hectare). If SCOUL were to pay UShs 2,500,000 per hectare, double the
upper range, the company would purchase 30,668 ha of land. For the equivalent of 7,186 ha, if SCOUL purchased the
land from private sources the company would pay UShs.17,965 million (or US$10.6 million), an amount less than the
compensation figure calculated in the study.
The study finally noted that in addition to the financial and economic questions presented above, other equally valid
issues needed further investigation. They include the need for compensation at ‘fair and equal’ value, the current
implied objective of national self-sufficiency in sugar production; and land acquisition options available to the
developer.
Viii The Economic Valuation of the Proposed Degazettement of Mabira CFR | 2011