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Timber is an important component of Ghana 's economy, making up approximately six per cent of GDP. It is the fourth largest foreign exchange earner, having provided around 12 per cent of Ghana 's foreign exchange between 1990 and 2000. Countries in the EU are Ghana 's major wood trading partners, accounting for just over half of total wood exports in 2004. The timber industry has grown considerably in recent years, driven by two main factors (i) a log export ban and (ii) the under-pricing of timber by Government. High profit making led to a doubling of installed capacity of the wood processing sector during the 1990s. This installed capacity is five times the annual allowable cut (AAC) of one million cubic metres estimated in 1997.

The timber sector in Ghana is characterised by poor levels of governance. Legislation, regulations and codes of practice, put in place to control harvesting and to protect the forestry resource have been either inadequate or not properly enforced. The institution responsible for forest control, the Forestry Commission (FC), retains a number of potentially conflicting functions (e.g. law enforcement, monitoring, forest management, and revenue collection). However, there is increasing demand for improved transparency and accountability within the sector, much of this led by an emerging national civil society concerned over forest use. One of the main challenges to the introduction of reform is the presence of strong, long-standing alliances within the forest sector, involving producers, politicians and the forest authority who wish to maintain the status quo.

A major government initiative began in January 2005, with the start of the Validation of Legal Timber Programme (VLTP). The purpose of the VLTP is to put in place an efficient and cost-effective system for demonstrating the legal origin of timber, and subsequently, legal compliance of forest management. The Government of Ghana is investing up to US$ 2 million of its own resources to develop this new system.

The role of the FC would be redefined under the proposed control system. The monitoring and verification functions currently undertaken by the FC would become the responsibility of a new institution: the Timber Validation Agency (TVA). The FC and TVA are expected to enter into a 'partnership agreement', under which the FC will separate its role as a regulator from that of validation and verification, which will become the responsibility of the TVA.

An Independent Observer is also planned to increase the creditability and transparency of the system. The system design envisages a separation of function between the TVA and the Independent Observer. Implementation of the monitoring system would rest with the TVA, with its final output being the certificate of legality. The role of the Independent Observer would be to test the standards of the monitoring system.

A third new element of the control system is a proposed Operating Council, which would act as the sector watchdog, with representatives from the main institutions and stakeholder groups. The council would oversee the functioning of the control system, follow up forest law enforcement in general, and run a conflict resolution mechanism.

Whether the VLTP is successful in introducing this new control system remains to be seen. However, this initiative has helped define the issues as the debate on timber verification develops in Ghana . Several lessons have already emerged: first, the current state monopoly over the control system presents many challenges in terms of improving accountability and transparency within the sector. Second, commitment from Government is essential to set the right economic price for timber. Third, a process mutually acceptable to all the main stakeholders may necessitate phased implementation of a timber verification system. In doing so, the initial technocratic focus on improving the control system needs to give way to a more nuanced approach, that acknowledges - and addresses - the political dimension of reform within the timber sector.