economic efficiency and incentives for change within namibia's community wildlife use...

Economic Efficiency and Incentives for Change

within Namibia’s Community Wildlife Use Initiatives

JONATHAN I. BARNES, JAMES MACGREGORMinistry of Environment and Tourism, Windhoek, Namibia

and

L. CHRIS WEAVER *

World Wildlife Fund (US) Living in a Finite Environment (LIFE) Program,Windhoek, Namibia

Summary. — Five community wildlife conservation and utilization initiatives, or conservancies,on communal land in Namibia were appraised to determine economic and financial worth.Conservancies are economically efficient and able to contribute positively to national income andthe development process. They also provide a channel for the capture of international donor grants(wildlife non-use values) as income, and generate attractive financial returns for communities.Donor grants are very important catalysts in promoting land use change in conservancies. Abilityto generate income from tourism is important. Flexibility and adaptability in design are key factors,ensuring effective rural development and conservation. � 2002 Elsevier Science Ltd. All rightsreserved.

Key words — Africa, Namibia, community, wildlife, economics, incentives

1. INTRODUCTION

In this paper, five community wildlife con-servation and utilization initiatives, on com-munal land in Namibia, have been analyzed todetermine their financial profitability, and theireconomic efficiency. The degree to which thesecommunity projects can contribute positivelyto the national income, and thereby to theeconomic development process, is central to thestudy. Also investigated was the degree to whichthe initiatives provide private returns to projectinvestment, as well as to investments made bycommunities.Namibia has adopted policy and legislation

to allow community-based natural resourcemanagement (CBNRM) 1 on communal land.Much of the initial focus of CBNRM has beenon wildlife, which is threatened with displace-ment by growing rural human populations andillegal use. The approach devolves rights overwildlife to local communities and aims to makewildlife conservation part of the rural devel-opment process. In this context, CBNRM ini-

tiatives must be financially attractive for thecommunity, economically efficient for the

World Development Vol. 30, No. 4, pp. 667–681, 2002� 2002 Elsevier Science Ltd. All rights reserved

Printed in Great Britain0305-750X/02/$ - see front matter

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*Work on this paper has been supported through

funding from the United States Agency for International

Development (USAID), through the World Wildlife

Fund (US) LIFE Program, under terms of Agreement

no. 623-02510A-00-3135-00, the Overseas Development

Institute, the British Department of International De-

velopment (DFID), the Swedish Government (Sida) and

the Namibian Government. Opinions expressed herein

do not necessarily reflect those of any of these organi-

zations. We sincerely thank all the many individuals who

assisted with data collection, data analysis, interpreta-

tion and comments. Of particular help were Helen Suich,

Michael Humavindu, David Callihan, Dhyani Berger,

Karl Aribeb, Patricia Skyer, Anna Davis, Garth Owen-

Smith, Margaret Jacobsohn, Colin Nott, Brian Jones,

Ruud Klep, Benny Roman, Caroline Ashley, Richard

Diggle, Jo Tagg, Simon Mayes, Chris Brown, Peter

Tarr, Teofilus Nghitila, Brian Child and Klemens

/Awarab. Responsibility for all mistakes is ours. Final

revision accepted: 3 December 2001.

667

country, and reasonably financially viable fordonors and the government. Without theseincentives, they will not be sustainable, and willnot result in development or conservation.

(a) The setting

Namibia is a large country (830,000 km2)straddling the Tropic of Capricorn on the westcoast of southern Africa. It is very dry, andclimate ranges from semi arid in the northeastto extremely arid on the west coast. Vegetationranges from savanna woodland in the north-east, through savanna to desert in the west andsouth. Rain-fed crop production is limited tovery small parts of the north and northeast.Most land in the country is only suitable forextensive grazing by livestock or wildlife, andrangeland carrying capacities are low. Perma-nent surface water is restricted to a few riverson the northern, north eastern and southernborders.The human population of the country, at 1.7

million, is small, with 30% living in urbancenters. The rural economy has two differenttenure systems. Forty-three percent of thecountry, mostly in the drier parts, containsprivate, medium scale, commercial ranches.Forty-five percent, mostly in the less drynorth, is communal land. Communal land isstate-owned, but occupied by rural tribalcommunities—most of the country’s popula-tion. Communities practice traditional systemsof pastoralism in the south and west, and agro-pastoralism in the north and northeast, buttheir access to markets and infrastructure ispoor. In the northeast, among San communi-ties, some sedentary hunting and gathering ispracticed.Wildlife resources of high importance for

tourism occur in less densely settled northwestern and north eastern communal lands.Elephant (Loxodonta africana), buffalo(Syncerus caffer), hippopotamus (Hippopota-mus amphibius), sable (Hippotragus niger), roan(Hippotragus equinus), lechwe (Kobus leche),sitatunga (Tragelaphus spekei), lion (Pantheraleo), leopard (Panthera pardus) and wild dog(Lycaeon pictus) are of conservation impor-tance in the northeast. In the northwest, desert-adapted wildlife species such as elephant, blackrhinoceros (Diceros bicornis), mountain zebra(Equus zebra), springbok (Antidorcas marsupi-alis), kudu (Tragelphus strepsiseros), and oryx(Oryx gazella) occur. Attractive scenery, en-hancing tourism value, exists in both places.

Communities were historically not permittedto use these wildlife resources, and were effec-tively alienated from them. The tendency wasfor expanding traditional land uses to displacewildlife, and poaching was fairly common. Inthe 1980s, local nongovernment organizations(NGOs) initiated donor-funded communitygame guard programs, giving some communi-ties a sense of ‘‘ownership’’ over their wildlife.

(b) CBNRM in Namibia

In the late 1960s, Namibia granted privatelandholders custodial rights to manage and usewildlife on their land (Joubert, 1974). The in-centives associated with this have resulted inincreased wildlife stocks on this land (Barnes &de Jager, 1996). In 1996, a legislative amend-ment granted similar custodial rights over wild-life to communities on communal land (Corbett& Jones, 2000; Jones, 1995; Jones & Murphree,2001). This change, part of a national CBNRMprogram, made it possible for communities toform ‘‘conservancies,’’ register these, and thusacquire, from the state, partial rights to com-mon property management and use of wild-life in defined areas. By 2001, 14 conservancieshad been registered, and some 20 more werein the process of being developed. About fiveconservancies had drawn up plans for the useand management of their natural resources,mainly wildlife.The CBNRM program is loosely coordinated

from within government and local NGOs, bythe Namibia Association of CBNRM SupportOrganizations (NACSO). Communities are as-sisted by the local NGOs, donor-funded pro-jects, and a government-backed policy andlegislative framework. Funding for this assis-tance comes mainly from international donors.It takes the form of grants to pay for technicalassistance, local NGO facilitation and trainingactivities, and some conservancy recurrent andcapital requirements. Since the 1980s commu-nities interested in CBNRM have benefited tovarying degrees from donor funds, initially,mainly to employ community members inwildlife protection (community game guards),but also to provide facilitation and training, aswell as, lately, capital investments. One aim ofCBNRM is for donor inputs to conservanciesto be gradually replaced by income from nat-ural resource use, leaving communities self-sufficient. To some extent this has happened,but so far no conservancies are entirely self-

WORLD DEVELOPMENT668

sufficient financially, and many receive a sig-nificant proportion of their income from do-nors.The potential for income generation from

natural resources in conservancies is dominatedby nonconsumptive tourism (Barnes, 1995a,b),partly through community-owned and run ac-tivities (mostly campsites), and partly throughjoint ventures between communities and pri-vate sector investors (lodges and camps). Asecond important source of income is safarihunting tourism, also involving joint-venturearrangements. Other, less significant and morelocalized income sources include thatch-grassharvesting, fishing, pole and fuel-wood har-vesting, cultural services (traditional villagesand shows), crafts production, game meat har-vesting and live game sale. Communities bearcosts associated with wildlife in the form ofdamage to crops in agro-pastoral areas and towater points in the drier pastoral areas. Suchcosts, as estimated from limited empirical re-search, are documented by Barnes (1995b).They generally amount to less than 5% of wild-life use values. This is a relatively low value, inthe broader African context, and it appears tobe due to the low productivity of the land foragriculture and livestock, as well as the rela-tively low human population densities.CBNRM (or ICDP or CWM) interventions

are based on the contention that if communitiesare allowed to benefit directly from the use ofnatural resources, then they will have an in-centive to invest in and conserve these resources(Barbier, 1992; Callihan & Stuart-Hill, 2000;Child, 1993; Emerton, 2001; Lewis, Kaweche,& Mwenya, 1990; Roe, 2001). Many conser-vation programs in developing countries nowinclude CBNRM strategies, and they are widelyseen as essential for wildlife conservation, par-ticularly outside protected areas. Some work-ers, such as Gibson and Marks (1995), Barrettand Arcese (1995), Sullivan (1998), and Infield(2001), consider that CBNRM, as practiced inAfrica, is inadequate as a conservation and/ordevelopment strategy. Problems listed includeinappropriate incentive structures, inappropri-ate distribution of benefits, lack of suitablydemocratic institutions, intracommunity con-flicts, excessive reliance on consumptive wildlifeuse, excessive reliance on financial benefits fromnatural resource use, and others. In the case ofNamibia’s CBNRM program, most of theseproblems appear to be applicable only excep-tionally, or not at all. Design of CBNRM inNamibia has involved care to try and ensure

that scale, institutional structures, combina-tions of resource uses involved, and combina-tions of economic values captured, are flexibleand appropriate to the specific setting.One unresolved question, however, is a

common assertion or suspicion that materialbenefits, resulting from tourism and con-sumptive wildlife use in CBNRM, are inade-quate to compensate communities for all thecosts of investing in wildlife (Barrett & Arcese,1995; Infield, 2001). Apart from a few studies(Barnes, 1995c; Barnes, Cannon, & Morrison,2000; Bond, 2001; Jansen, 1990), no rigorousanalysis has been done of the financial and/oreconomic merits of CBNRM as a developmentstrategy. Most discussion about this has had tobe conjectural. Our study directly addresses thisquestion, in the context of Namibia.

2. METHODS

Five conservancies were selected as beingwell enough established, and having wellenough developed management plans to allowfinancial and economic appraisal to be carriedout. These were examined as investments, interms of their value to the community, to theproject proponents (financial analysis), andin terms of their value to Namibian society(economic analysis). The analyses are thusprimarily appraisals of conservancy develop-ment plans and projected incomes, rather thanex post evaluations of past conservancy perfor-mance. But, most of the five conservanciesstudied have been in the process of develop-ment for several years, and the models devel-oped, reflect actual events for these early years.The analysis needs to be seen in the context

of ‘‘total economic value’’ of the wildlife andnatural resources, as described by Pearce andTurner (1990) and Emerton (2001). Total eco-nomic value embraces direct use, indirect use,and non-use (option, bequest and existence)values associated with natural resources. Directuse values are derived from actual utilization ofthe resource. They contribute tangible value inthe form of income, and make up the maincomponent of formal economic growth, whichis the focus of national development efforts.Indirect use values are derived from ecologi-cal or social function (such as erosion pro-tection, waste assimilation, political stability,etc.). Option values reflect the values perceivedin retaining the option to use the resourcein the future. Bequest values reflect the value

NAMIBIA’S COMMUNITY WILDLIFE USE INITIATIVES 669

perceived in preserving or retaining the re-source for others in the future, and existencevalues reflect the value perceived in retainingthe mere existence of the resource.The focus of this analysis was on direct use

values and here we measured the income de-rived from actual use of natural resources inNamibia. No significant indirect use valueswere identified and they were not specificallyconsidered. Non-use values were considered,but only as manifested in donor contributionsaimed at conserving wildlife in conservancies,as they benefit communities. An example ofnon-use value would be the income derivedthrough conservancy game guard wages, wherethese are funded from donors.As pointed out by Emerton (2001), Adams

and Infield (2001), Hulme and Infield (2001),costs associated with wildlife include invest-ments in protection, costs of damage caused bywildlife, and land use opportunity costs. Ouranalysis focuses on the value of the conservancyas an investment. We developed individualmodels where the project boundary embracedonly the specific conservancy, and the costs andbenefits directly associated with it. We did notinclude land opportunity costs, central govern-ment investment costs, or benefits associatedwith forward and backward linkages. Thesewould all be part of broader analyses, for ex-ample, of a national CBNRM program, or anational wildlife investment program. But thebroader context is discussed in relation to somefindings from elsewhere, in Botswana and Na-mibia. The latter findings suggest that, in mostNamibian conservancies, the economic oppor-tunity costs associated with land are low.

(a) Financial and economic models

Detailed static and dynamic, budget andcost–benefit spreadsheet models were devel-oped for specific resource use activities withinconservancies, and then, making use of theseresults, for each conservancy as a whole. Thebenefits of natural resource use were measured,in a cost–benefit framework, against the costsof investing in and undertaking the activity.The project boundary in the conservancy ana-lysis embraced community activities and in-vestment. Thus, where joint ventures betweencommunities and the private sector were in-volved, only the net benefits accruing to thecommunity from the venture were included inthe model.

The models were based on empirical data,gleaned through interviews with wildlife useenterprises and conservancies, through exam-ination of financial data from conservancyoperations, and from management plans forconservancies. The data were collected during1998–2000, and financial values in models wereinflated to 2000 prices. The wildlife use andconservancy models measured financial profit-ability (annual net income, financial rate ofreturn, financial net present value) from thepoint of view of the user or investor. They alsomeasured economic efficiency (annual contri-bution to gross and net national income, eco-nomic rate of return, economic net presentvalue), all in economic (or shadow) prices, fromthe point of view of Namibian society. Theconservancy models measured financial profit-ability from both the community and projectperspectives.Static budget models measured annual fi-

nancial returns at full production after deduc-tion of all capital and recurrent financial costsincluding interest and amortization. The dy-namic cost–benefit models measured financialand economic returns over five- and 10-yearinvestment periods. Here, interest and inflationwere excluded from all calculations. Cost andbenefit flows were in constant prices and dis-counted over time to reflect the time value ofmoney. A real discount rate of 8% was used forboth financial and economic models. All capitalexpenditures were included and depreciation(or appreciation) was accounted for in the re-sidual value of assets in the final year of ana-lysis.Important economic measures from the static

budget models are gross and net national in-come (GNI and NNI), as defined by Gittinger(1982). These are the returns in gross and netvalue added to factors of production owned byNamibian nationals. NNI is GNI minus annualcapital asset depreciation. In economic analysisthe economic cost, or benefit, to society, ofusing or producing a resource is taken to beits opportunity cost (the value of its best al-ternative use). The data are based on finan-cial transactions, but where financial pricesdiffer significantly from opportunity cost, thenshadow pricing is applied. Our GNI and NNImeasures thus gauge economic efficiency, unlikethe statistical measures of national income,presented in national accounts.

Shadow pricing, aimed at ensuring that valuesapplied to inputs and outputs reflect their op-portunity cost or real scarcity in society (rather


than simply market prices), was applied in theeconomic analyses. Standard criteria for sha-dow pricing in Namibia are not available, so pre-liminary ones, developed by Barnes (1994),were used. These were largely modified fromstandardized ones used in the past in Botswana(Matambo, 1988; Ministry of Finance & Deve-lopment Planning, 1986), South Africa (CEAS,1989), and the World Bank (Gittinger, 1982).Namibia’s economy has been relatively open

in recent years, with few price distortions, andin many cases market prices fairly reflectopportunity cost. Shadow pricing adjustmentswere limited to the following. Domestic trans-fers such as taxes, and subsidies, were elimi-nated as costs or benefits. Taxes included salestax, license and permit fees. Subsidies includedthose from government for live game stocking.All conservancies benefited from grants to as-sist with capital and recurrent inputs, providedby donors from outside the country. Thesegrants, however, were considered convertibleto other applications outside conservancies,within Namibia, and to thus have opportunitycosts. They were treated not as subsidies but ascosts in the economic analysis.The models included a detailed stock pro-

jection over the investment period, depict-ing the anticipated growth, or not, of wildlifestocks by species. This incorporated the initialwildlife populations determined from aerialcensus, the natural growth potential of eachspecies, any purchase/acquisition of stock, anynatural immigration of stock, and off-takes.Natural growth potential for each species wascalculated using the method of Craig andLawson (1990) and Spinage (FGU-Kronberg,1987). This was based on the formula 0:4rm,where rm is the intrinsic rate of increase of thepopulation, and a function of the body weightof the species concerned. Wildlife bio-mass wasmeasured as large stock unit equivalents (LSU),the metabolic equivalent of a 450 kg ox, usingthe conversion ratios of Meissner (1982). Apartfrom the financial value of some purchases(subsidized), and some natural immigrationfrom neighboring Botswana (no cost), the valueof the stock was made at opportunity cost. Inthe economic model and the project financialmodels, the residual value of wildlife stocks inthe conservancy, was included within residualassets. In the case of community financialanalysis these stocks were not included in re-sidual value (as communities would not be ableto recover this stock value at the end of theperiod).

A general shadow price for unskilled andsemi-skilled labor of 0.35 of the market pricewas applied in the economic models to reflectgeneral unemployment and social pressure forhigher wages. A foreign exchange premium of6% was added to the prices of all tradableitems in the economic models, to account forgeneral excess demand for traded and tradablegoods and services. In the economic models,inflows from, and outflows to, non-nationalswere treated as benefits and costs, respectively.This ensured measurement of national income.All economic models included an opportunitycost of capital of 8%, but, as explained above,land opportunity costs were excluded. This al-lowed direct comparison between model re-sults regarding returns to land. Economicmodels also did not include national expendi-tures made by central government in the wild-life or agricultural sectors. Excluded werebenefits accruing to private joint-venture part-ners in the conservancy, or to service providersor producers outside the conservancy. Cost ofdamage caused by wildlife was included, mainlythrough inclusion of the costs of mitigatingdamage. Mitigation costs are used as proxy fordamage costs, and thus represent damage costsaverted.All models were tested through sensitivity

analysis, by varying key assumptions to deter-mine how robust they were, and the strength ofconclusions that can be drawn from the results.The extent to which financial returns differedfrom the economic ones was used to provide ameasure of the influence of policy and/or mar-ket imperfections, as described by Jansen,Bond, and Child (1992).Where values are given in this paper they are

in Namibia dollars (N$). At the time of theanalysis, in 2000, N$1.00 was equal to US$0.14.

3. RESULTS AND DISCUSSION

(a) Conservancy profiles

Table 1 shows some of the features of thefive conservancies analyzed. They range fromnear desert conditions in the northwest (Torra,¼ /Khoadi //Hooas), via the northern Kalahari(Nyae Nyae), to semi-arid woodlands/flood-plain habitats in the northeast (Mayuni, Sal-ambala). They vary greatly in extent fromalmost a million hectares in Nyae Nyae, wherenonwildlife land uses are relatively unimportantto 28 000 ha in Mayuni 2 where half the land


is used for fairly intensive agro-pastoralism.Some conservancies possess naturally intactwildlife resources combined with attractivescenery, on at least part of their land (Torra,Mayuni), while in others wildlife resources aredepleted and require restocking or investment(Salambala, Nyae Nyae).In the northwest (Torra, ¼ /Khoadi //Hooas,

occupied by Damara communities) the tradi-tional land use is pastoralism, that in thenorthern Kalahari (Nyae Nyae, occupied bySan communities) is hunting and gatheringwith low-intensity pastoralism, and that innortheast (Mayuni, Salambala, occupied byMafwe and Masubia communities) is agro-pastoralism. Mayuni is unusual among thefive in that it embraces part of a protected area.¼ /Khoadi //Hooas is unusual in being permit-ted, by the veterinary authorities, to captureand sell live game animals. The number ofhouseholds associated with conservancies varyfrom 120 in Torra to 1200 in Salambala.

(b) Financial and economic values

The results of the conservancy valuation aresummarized in Table 2. These values givecomparisons of the project investment, projectincome, community income, and the economicvalue of the conservancy investment. The eco-nomic values tell us whether the initiative con-tributes positively to national development ornot. In all cases the conservancies do, with

positive annual contributions to gross andnet national income, positive net presentvalues, and favorable internal rates of return(all significantly higher than the 8% cut-offrate). For comparative purposes it is useful toseparate the conservancies ecologically intothose in semi-desert sites (Torra and ¼ /Khoadi//Hooas), those in the mesic northeast (Mayuniand Salambala), and that in an intermedi-ate setting (Nyae Nyae). Land use is gener-ally much less intensive in the semi-desert ofthe northwest, and relatively more intensivein the woodlands and floodplains of the north-east.The Torra and Mayuni conservancies stand

out as having the most favorable returns, bothwithin their own ecological setting and overall.It is notable that Mayuni, which has access to adry-season wildlife concentration area withprime tourism potential, has particularly highnet benefits per unit of land. The Nyae Nyaeand Salambala conservancies are relatively in-efficient economically, with lower rates of re-turn and lower net contributions per unit ofland. The ¼ /Khoadi //Hooas, conservancy isintermediate in terms of economic value. Thedifferences tend to reflect the balance betweenthe annual net benefits and the capital gainsgenerated by the conservancy. Torra andMayuni show relatively high annual contribu-tions to national income as well as some overallgains in wildlife stocks. Nyae Nyae and Sal-ambala have low annual net contributions toincome, and rely more on net gains in wildlife

Table 1. Comparative physical characteristics of the five Namibian conservancies in 2000

Characteristics Conservancy

Torra ¼ /Khoadi//Hooas

NyaeNyae

Mayuni Salambala

Land area (ha) 352,200 386,000 900,095 28,400 93,000Corea wildlife area (ha) 108,586 177,650 900,095 13,300 11,000Households (no.) 120 700 700 450 1,200Mean annual rainfall (mm) 90 150 450 600 650Rangeland carrying capacity (ha Per LSU equivalent) 30 25 15 12 12Starting wildlife densityb (ha Per LSU equivalent) 427 160 464 43 3,875Expected wildlife densityb in year 10 (ha Per LSUequivalent)

257 119 251 29 85

Non-consumptive tourism potential High Mod high Mod low High Mod lowSafari hunting tourism potential Mod high Mod Mod high Low ModConsumptive wildlife use potential Low Low Low Low LowOther natural resource use potential Low Low Mod low Mod ModLivestock keeping potential Very low Very low Mod Mod Mod

aCore areas, allocated primarily to wildlife (rest of land shared between wildlife and livestock).bDensity calculated for the total land area.


stocks. Both these two conservancies also re-quired significant capital investments in devel-opment of these stocks.The community financial values tell us to

what extent the communities have an incentiveto invest in the initiative. In all cases the com-munities can derive very favorable returns ontheir investments (Table 2). The Torra andMayuni conservancies are able to earn the mostcash income and dividends per household,while the Mayuni, ¼ /Khoadi //Hooas and Torraconservancies, all show very high financial ratesof return. The Nyae Nyae and Salambala con-servancies provide the least attractive returnsfor communities. The dominant feature of thecommunity analysis is the fact that donors, andnot the communities, bear many of the initialcapital and recurrent input costs. All conser-vancies benefit from donor assistance in thisway. Another feature of the community ana-lysis is that it does not incorporate the accu-

mulation of wealth in conservancy wildlifestocks.The project financial values reflect the returns

to the project investor, i.e., the donors, gov-ernment and community, viewed as one en-tity. They provide an indication of the broaderfinancial viability of the initiative. Here, alldonor contributions are costs, and so arehousehold dividend payments, but increasein the value of wildlife stocks is included as abenefit. Project investors do not, themselves,require large positive returns but seek only toensure that they do not incur losses, whichwould require subsidization. As seen in Table 2,the project returns are moderate but generallypositive and acceptable.

(c) Sensitivity analysis

The degree to which the values measured inthe financial and economic analyses are robust

Table 2. Base case financial and economic values for the five Namibian conservancies in 2000 (N$)

Value Conservancy

Torra ¼ /Khoadi //Hooas Nyae Nyae Mayuni Salambala

Project financial valuesInitial capital investment 1,190,432 868,586 3,522,521 770,778 1,418,610Capital investment per ha 3.4 2.3 3.9 27 15Capital investment per household 9,920 1,241 5,032 1,713 1,182Annual net cash income 95,300 69,400 )267,100 333,100 133,800Financial rate of return 16% 19% 15% 8% 8%Financial net present valuea 860,800 1,428,500 2,377,400 0 0

Community financial valuesAnnual community cash incomeb 406,544 418,556 204,673 732,704 426,058Cash income per household 3,388 598 292 1,628 355Cash income per ha 1.2 1.1 0.2 26 4.6Financial rate of return 133% 205% 23% 220% 40%Financial net present valuea 2,133,200 3,350,000 1,364,400 3,696,300 1,347,900Annual community dividendsc 228,000 207,900 114,400 225,000 168,700Dividends per household 1,900 297 163 500 141

Economic valuesAnnual gross value addedd 557,600 503,800 501,600 860,200 525,800Annual net value addede 487,611 459,551 278,621 820,816 455,368Net value added per ha 1.4 1.2 0.3 29 4.9Economic rate of return 131% 66% 22% 126% 31%Economic net present valuea 3,662,300 4,010,100 4,114,900 4,059,000 2,587,800Number of jobs createdf 8 12 26 22 12Economic capital cost per job 138,394 67,257 177,955 32,025 127,285

aMeasured over 10 years at 8% discount.b Includes salaries and wages for conservancy employment, net cash income, and dividends.cAnnual surplus extracted for distribution to households.dGross value added to national income at opportunity cost (economic prices).eGross value added minus asset depreciation.f Permanent formal employment opportunities from conservancy operations, excluding jobs created within revenuesharing and joint-venture tourism operations.


in the face of changes in model parameters wastested using sensitivity analysis. This providesan indication of the validity of the conclusionsdrawn from the results, as well as more infor-mation on the characteristics of the invest-ments.Table 3 provides some results of sensitivity

analysis of the Nyae Nyae conservancy model.Variation in capital expenditure, tourism de-velopment, wildlife stock densities and stockoff-take rates were tested, as well as the in-clusion or not of live game sales and stockpurchase/acquisition. The economic viability isonly weakly affected by significant changes incapital investments. It is also only moderately

affected by the changes in wildlife densitiesand tourism investments, the two of which areclosely linked. Replacement of subsistencehunting with live game sale (assuming relax-ation of veterinary restrictions) would onlyslightly enhance the economic value. But, anincrease in wildlife off-take intensity, to thatapproaching the maximum sustainable level,would halt herd growth, reduce the potentialfor tourism development, and reduce the eco-nomic value of the investment. This findingconfirms the need for enhancement of wildlifestocks in the conservancy, but enhancement ofthese stocks through acquisition from withinNamibia reduces the economic viability of the

Table 3. The effects of change in some base case parameters on internal rates of return in the Nyae Nyae conservancyfinancial and economic model in Namibia, 2000

Internal rate of return

Economic (%) Financial (project) (%) Financial (community) (%)

Capital expenditure50% of base case 36 25 5175% of base case 27 19 33Base case 22 15 23125% of base case 18 12 16150% of base case 15 10 11

Tourism developmenta

No lodges, 2 campsites 11 8 01 lodge, 2 campsites 16 11 122 lodges, 3 campsites (base case) 22 15 233 lodges, 4 campsites 28 19 324 lodges, 5 campsites 36 24 40

Wildlife densities50% of base case 12 6 1475% of base case 17 11 18Base case (251 ha/LSU) 22 15 23125% of base case 26 19 27150% of base case 30 22 30

Live game saleNone (base case) 22 15 2325% of meat off-takeb 22 16 2450% of meat off-take 23 16 2575% of meat off-take 24 17 26

Stock acquisitionc

Base case (447 LSU) 22 15 23Halved 29 15 22None 36 15 22

Stock off-take intensityHalf growth potential (base case) 22 15 23Maximum-reduced tourismd 13 7 14

aDifferent scenarios of tourism development.b Live game capture and sale replaces 25% of subsistence hunting off-take.c Purchase of wildlife stock for release in conservancy.d Initial wildlife stock densities maintained through maximum off-take (tourism growth reduced).


conservancy. These acquisitions carry oppor-tunity costs, which are not sufficiently offset byincreased tourism and stock enhancementbenefits. The benefits of restocking efforts arelikely to have wider and longer term impacts,outside the framework of the specific conser-vancy analysis and will be reflected throughstock enhancement in the neighboring pro-tected and communal areas.The effect of sensitivity analysis on project

financial returns shows patterns similar to thosefor the economic returns. One difference con-cerns stock acquisition, which does not reducethe project or community financial values, as itdid with the economic value. This is becausestock acquisition is generally heavily subsi-dized. The findings in Table 3 show that com-munity incentives (community rates of return)are moderately affected by variation in capitalexpenditure. Community incentives are also

moderately affected by loss of income earningpossibilities caused by low wildlife densities andresultant loss of tourism potential.Tables 4–6 show some sensitivity analysis

results for all the five conservancies. The effects,on economic net value added and communityincome, of changes in capital costs, and tourismincome, as well as inclusion, or not, of con-sumptive wildlife uses, are shown. Table 4 de-picts results for Torra and ¼ /Khoadi //Hooas.Both measures, in both conservancies, areweakly sensitive to changes in capital expendi-tures. Changes in income from both non-con-sumptive and consumptive tourism, have amoderate effect on the economic and commu-nity values, with the Torra model being a lit-tle more sensitive than the ¼ /Khoadi //Hooasone. The ¼ /Khoadi //Hooas values are highlysensitive to the elimination of consumptivewildlife uses, while those of Torra are almost

Table 4. The effects of change in some base case parameters on net value added and community income in the financialand economic models for the Torra and ¼ /Khoadi //Hooas conservancies in Namibia, 2000

TorraTourism incomea (variation) 50% 75% Base case 125% 150%Net value added per ha 0.41 0.90 1.38 1.87 2.36Community cash income per ha 0.35 0.75 1.15 1.56 1.96

Capital costs (variation) 50% 75% Base case 125% 150%Net value added per ha 1.63 1.51 1.38 1.26 1.14Community cash income per ha 1.36 1.26 1.15 1.05 0.95

Meat and live gameb (inclusion) Yesd NoNet value added per ha 1.38 1.06Community cash income per ha 1.15 0.88

Consumptive wildlife usec (inclusion) Yesd NoNet value added per ha 1.38 0.83Community cash income per ha 1.15 0.69

¼ /Khoadi //HooasTourism incomea (variation) 50% 75% Base case 125% 150%Net value added per ha 0.78 0.89 1.19 1.49 1.79Community cash income per ha 0.74 0.83 1.08 1.83 1.58




a Tourism here, embraces both non-consumptive tourism and safari hunting.b Embraces all consumptive use of wildlife by communities, but excludes safari hunting.c Embraces all consumptive use of wildlife, including safari hunting.d Base case.


Table 6. The effects of change in some base case parameters on net value added and community income in the financialand economic models for the Mayuni and Salambala conservancies in Namibia, 2000

MayuniTourism incomea (variation) 50% 75% Base case 125% 150%Net value added per ha 14.43 21.66 28.90 36.13 43.37Community cash income per ha 12.17 18.99 25.80 32.62 39.43


Meat and live gameb (inclusion) Yesc NoNet value added per ha 28.90 27.69Community cash income per ha 25.80 24.66


SalambalaTourism incomea (variation) 50% 75% Base case 125% 150%Net value added per ha 1.27 3.08 4.90 6.71 8.52Community cash income per ha 1.58 3.08 4.58 6.08 7.59




a Tourism here, embraces both non-consumptive tourism and safari hunting.b Embraces all consumptive use of wildlife by communities, but excludes safari hunting.c Embraces all consumptive use of wildlife, including safari hunting.d Base case.

Table 5. The effects of change in some base case parameters on net value added and community income in the financialand economic models for the Nyae Nyae conservancy in Namibia, 2000

Nyae NyaeTourism incomea (variation) 50% 75% Base case 125% 150%Net value added per ha )0.23 0.04 0.31 0.58 0.85Community cash income per ha )0.28 0.03 0.23 0.48 0.74

Capital costs (variation) 50% 75% Base case 125% 150%Net value added per ha 0.61 0.46 0.31 0.16 0.01Community cash income per ha 0.62 0.42 0.23 0.03 )0.16

Meat and live gameb (inclusion) Yesd NoNet value added per ha 0.31 )0.19Community cash income per ha 0.23 )0.24

Consumptive wildlife usec (inclusion) Yesd NoNet value added per ha 0.31 )0.54Community cash income per ha 0.23 )0.58a Tourism here, embraces both non-consumptive tourism and safari hunting.b Embraces all consumptive use of wildlife by communities, but excludes safari hunting.c Embraces all consumptive use of wildlife, including safari hunting.d Base case.


not at all. Generally these sensitivity analysesconfirm the findings in Table 2, that the Torrainvestment is economically very efficient andthat of ¼ /Khoadi //Hooas, being slightly morevulnerable, is moderately so.Table 5 shows results for Nyae Nyae and

here, it is clear that the economic and com-munity returns are sensitive to capital expen-diture changes, highly sensitive to changes intourism income and extremely sensitive to theexclusion of consumptive wildlife uses. Therelative vulnerability of the returns is a reflec-tion of the somewhat weak economic efficiencyand financial profitability noted for this con-servancy in Table 2. Table 6 shows results forMayuni and Salambala. Here, the Salambalainvestment shows itself to be somewhat sensi-tive to changes in tourism income, and onlymoderately sensitive to changes in capital ex-penditures or loss of consumptive wildlife uses.The Mayuni investment is only moderatelysensitive to changes in tourism income and veryinsensitive to changes in capital costs and lossof consumptive wildlife uses. The results con-firm the finding in Table 2, that Mayuni is avery attractive investment for Namibian societyand the community, while that for Salambala issomewhat less so.

(d) Discussion

Our study has shown that conservancy in-vestments in Namibia are economically efficientand contribute positively to national economicwell-being. This conforms to the findings ofBarnes (1995c) and Barnes et al. (2000) forcommunity wildlife use initiatives in Botswana.It refutes the speculative assertion, made byBarrett and Arcese (1995) that wildlife use ini-tiatives are likely to be economically unsound.Our analysis of economic efficiency measuresonly the return in national income, which re-flects direct use value and it does not includeinternational donor grant contributions (whichit treats as having opportunity costs withinNamibia). This is a reflection of the fact thatthe project boundary for the economic analysisis around the individual conservancy. Withoutthe specific conservancy, the international do-nor contributions would almost certainly bespent on wildlife conservation somewhere elsein the country, and thus in the national contextthey can be seen as wildlife non-use values. Inthe national context, therefore, the economicvalue of CBNRM initiatives is enhanced by theinclusion of these non-use values.

Also excluded from our conservancy eco-nomic models are the contributions to nationalincome made by the private component of thejoint-venture tourism operations within con-servancies. It is debatable whether these shouldbe included within the conservancy projectboundary, but if so, they are significant andwould enhance the economic efficiency mea-sures.Our study has also shown that the financial

returns for communities from wildlife use ini-tiatives exceed their investments. This similarlyrefutes the general arguments made by Barrettand Arcese (1995) and Infield (2001), amongothers, which suggest they may not. But, thegenerally highly positive returns enjoyed bycommunities in Namibian conservancies comefrom two sources. On one hand, they comefrom utilization of wildlife in the conservancies(mainly through joint-venture agreements intourism activities) and, on the other, they comevia the grants from donors, investing in theCBNRM program. The former, are direct usevalues (net benefits of wildlife use), and thelatter (as discussed above) are effectively man-ifestations of non-use values (willingness to payfor conservation of the wildlife resources). In asmuch as both reflect true economic value, andboth flow into conservancies as a result ofconservancy development, they are both legiti-mate forms of income for the communities.Table 7 shows the effects of removal of donor

grants would have on the community financialrate of return. These effects are shown with andwithout the inclusion of the residual value ofwildlife stocks, which because they cannot ac-tually realize it, is an intangible benefit forcommunities. The findings suggest that receipt,by conservancies, of donor grants significantlyenhances community returns, but that only inthe weakly viable conservancies would theirremoval jeopardize community financial in-centives to participate. In at least three or fourof the five conservancies, direct use values aloneshould be sufficient to attract community in-vestment.The availability of donor grants, itself, pro-

vides an incentive for communities to increaseconservancy investment costs. This is happen-ing to some extent in Namibia and the rela-tively weak viability of conservancies, such asNyae Nyae, is partly due to the inclusion ofnonessential expenditures. Avoidance of thesewould enhance conservancy economic and fi-nancial viability, and should be part of theplanning process.


As Infield (2001) points out, CBNRM pro-grams have become important in internationalaid, and this is true for southern Africa. Itmight be suggested that this partial dependenceon donor contributions makes the initiativesunsustainable, but we would argue that forthree reasons this is unlikely. First, as shown inTable 7, loss of the donor income does notnecessarily eliminate community financial in-centives, but only reduces them. Further, asshown below, intangible benefits, such as em-powerment, training and improved livelihoodsecurity, also provide significant motivation.Second, the donor inputs to conservancies areconcentrated in the initial capital, and are fo-cused on building wildlife stocks, institutionsand skills, thus establishing the base for achange in land use. Later, further investmentsby conservancies, based on these sunk costs willhave higher returns and will most likely notneed enhancement by donors. Third, the donorcontributions, in as much as they reflect non-usevalues perceived in developed countries, arelikely to persist. Experience over 15 years insouthern Africa suggests that the flow of do-nor funds to CBNRM programs has beenenduring. Conservancies designed to captureboth use and non-use values, are likely to besustainable.Instability in markets for wildlife use activi-

ties can affect conservancy sustainability. Forexample, recent political events in southernAfrica have severely affected growth in non-consumptive tourism in parts of Namibia.Tourism income was sharply reduced in someof the conservancies under study. These con-ditions are likely to be temporary, but thesensitivity analyses presented in Tables 3–6 in-dicate that conservancy economic and financial

efficiency is moderately resilient in the face ofthem. Safari hunting, and other consumptivewildlife uses, might be severely affected bypressure from animal rights organizations. Thesensitivity analyses in Tables 4–6, show that theviability of three conservancies would be resil-ient, while that of two would be vulnerable, inthe face of a ban on consumptive wildlife use.The most successful conservancies are thosewith several different uses, dominated by non-consumptive tourism.Ashley (1998) investigated CBNRM initia-

tives in Namibia, including all of the conser-vancies analyzed here, for the importance ofintangible or non-financial benefits, as theseaccrue to communities, the natural resourcebase and Namibian society. She found these tobe substantial. The communities benefit fromcapacity building and empowerment, culturaland aesthetic values associated with wildlifeand local traditions, and more secure liveli-hoods. The latter are linked to the financialbenefits described in this paper, but go furtherin that cash injections from wildlife initiativesfill a critical gap within household copingstrategies, and thereby enhance livelihood secu-rity (Ashley & LaFranchi, 1997). This comple-mentary role reduces the likelihood of earningsfrom wildlife being invested in agriculturewhich could undermine the sustainability ofconservancies. Namibia’s CBNRM programappears able to capture the potential benefitsfrom including cultural values in communityconservation initiatives, as recommended byInfield (2001).The economic viability as demonstrated in

this paper, and the financial incentives availablefor communities in conservancy developmentfit in the broader framework of rural or na-

Table 7. The effect of donor grants (non-use values) on the financial rate of return to communities in the five Namibianconservancies in 2000

Community financial rate of return Conservancy

Torra(%)

¼ /Khoadi//Hooas (%)

Nyae Nyae(%)

Mayuni(%)

Salambala(%)

With donor grants without stocka 133 205 23 220 40Without donor grants with stockb 44 39 18 24 17Without donor grants without stockc 39 28 1 20 11

a Includes income to the conservancy from donor grants, but excludes residual value of wildlife stock appreciation (anintangible value for communities) in benefits.b Excludes income to the conservancy from donor grants, but includes residual value of wildlife stock appreciation(an intangible value for communities) in benefits.c Excludes income to the conservancy from donor grants, and excludes residual value of wildlife stock appreciation(an intangible value for communities) in benefits.


tional development. We have not measured theeconomic efficiency of the CBNRM program aswhole, or the wildlife sector as a whole, butevidence from Botswana, where this has beendone (Barnes, 2001; Barnes et al., 2000), sug-gests that the economic viability of individualconservancies extends to the broader context.Conditions in Namibia are very similar to thosein Botswana, and thus, allocation of conser-vancy land to wildlife, and not to other uses, islikely to be economically sound. This is the caselargely because both low human populationdensities and high tourism potential occur to-gether. The situation in countries where wildlifelands have high potential for intensive arableproduction will tend to be different. Here, ifinvestment in wildlife can be justified at all,more reliance on the appropriate capture ofwildlife non-use values would be needed. In anycase, more research on the economics of landuse allocation is needed.Namibia’s CBNRM program appears to

have avoided most of the design flaws andproblems which have been highlighted byBarrett and Arcese (1995), Gibson and Marks(1995), Infield (2001), Wells (1995) and Bond(2001). A key feature has been flexibility indesign (Jones & Mosimane, 2000). This allowsconservancies to adopt the locally appropriatescale, institutional design, combinations ofresource uses, and to capture appropriatecombinations of resource values (both use andnon-use). Conservancies in Namibia appearable to deliver positive financial incentives tocommunities, contribute positively to nationaldevelopment, conserve wildlife, and be at leastas sustainable as other rural development ini-tiatives. Ex post evaluation, using our measuresof efficiency and profitability in future years,will confirm whether this is truly so or not.

4. CONCLUSION

(a) Conservancies in Namibia, as consti-tuted and planned, are economically efficient.They are able to contribute positively to na-tional income and the development process.The likelihood of their being sustainable ishigh. Their receipt of donor funding, as part

of the national CBNRM program, meansthat they also provide a channel for thecapture of wildlife non-use values, as income.(b) Conservancies also provide very attrac-tive financial returns for communities. Thesereturns are made up of income from wildlifeuse (direct wildlife use values) as well as do-nor grants (reflecting international non-usevalues). The latter considerably enhance theattractiveness of conservancy investmentfor communities, but direct use values alone,can generate positive financial returns. Do-nor grants perform a very important cata-lytic role in initiating and speeding upland use change. From the donors’ perspec-tive, conservancies also tend to be financiallyviable.(c) Tourism (primarily nonconsumptive tour-ism but also safari-hunting tourism) is a par-ticularly important income generator for allconservancies. In the development of tour-ism, joint ventures between private investors,with skills and access to markets, and com-munities are very important. Other con-sumptive wildlife and natural resource usesare less important, but they serve usefullyto spread risk.(d) The existence of natural wildlife popula-tions on conservancies (reducing the needfor investments in stock) is a very signifi-cant factor affecting the economic efficiencyand financial viability of conservancies. Ac-quisition of stock for restocking is not eco-nomically efficient at the conservancy level,unless there are no opportunity costs in-volved. It can, however, have wider, longerterm economic benefits.(e) Flexibility and adaptability in designhas allowed Namibia’s conservancy initia-tives to embrace an apparently sound ruraldevelopment framework, which includessignificant intangible values and benefits aswell as financial income for communities,derived from both use and non-use. Theconservancies appear able to deliver posi-tive financial incentives to communities,contribute positively to national develop-ment, conserve wildlife, and be at least assustainable as other rural development ini-tiatives.

NOTES

1. CBNRM projects/programs are sometimes referred

to as integrated conservation-development projects/pro-

grams (ICDPs) or community-based wildlife manage-

ment (CWM) projects/programs.


2. For the purpose of this paper, the Mayuni conser-

vancy has been accorded a size of 28,400 ha, which is

composed of 15,100 ha in the proper Mayuni conser-

vancy, and 13,300 ha within which the conservancy has

tourism rights, in an adjacent protected area.

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